Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

AirMedia Group

(

AMCN

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified AirMedia Group as such a stock due to the following factors:

  • AMCN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.2 million.
  • AMCN has traded 65,198 shares today.
  • AMCN is down 5.1% today.
  • AMCN was up 14.9% yesterday.

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More details on AMCN:

AirMedia Group Inc. operates out-of-home advertising platforms primarily in the People's Republic of China. Currently there is 1 analyst that rates AirMedia Group a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Recommends

The average volume for AirMedia Group has been 536,800 shares per day over the past 30 days. AirMedia Group has a market cap of $208.5 million and is part of the services sector and media industry. Shares are up 36.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AirMedia Group as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • AIRMEDIA GROUP INC -ADS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AIRMEDIA GROUP INC -ADS reported poor results of -$0.44 versus -$0.18 in the prior year. For the next year, the market is expecting a contraction of 22.3% in earnings (-$0.54 versus -$0.44).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 868.4% when compared to the same quarter one year ago, falling from $1.46 million to -$11.20 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Media industry and the overall market, AIRMEDIA GROUP INC -ADS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AIRMEDIA GROUP INC -ADS is currently extremely low, coming in at 11.86%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -17.02% is significantly below that of the industry average.
  • AMCN, with its decline in revenue, underperformed when compared the industry average of 7.2%. Since the same quarter one year prior, revenues fell by 14.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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