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 or Stephanie Link.
Trade-Ideas LLC identified
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified E-House China Holdings as such a stock due to the following factors:
- EJ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.8 million.
- EJ has traded 909,680 shares today.
- EJ traded in a range 283.7% of the normal price range with a price range of $2.70.
- EJ traded above its daily resistance level (quality: 535 days, meaning that the stock is crossing a resistance level set by the last 535 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on EJ:
E-House (China) Holdings Limited, through its subsidiaries, operates as a real estate services company in China. The stock currently has a dividend yield of 0.9%. Currently there are 2 analysts that rate E-House China Holdings a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for E-House China Holdings has been 2.0 million shares per day over the past 30 days. E-House China has a market cap of $1.9 billion and is part of the financial sector and real estate industry. Shares are down 4.2% year-to-date as of the close of trading on Friday.
rates E-House China Holdings as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 34.5%. Since the same quarter one year prior, revenues rose by 43.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- EJ has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, EJ has a quick ratio of 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for E-HOUSE CHINA HOLDINGS -ADR is rather high; currently it is at 64.70%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.82% trails the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Real Estate Management & Development industry and the overall market, E-HOUSE CHINA HOLDINGS -ADR's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Powered by its strong earnings growth of 177.77% and other important driving factors, this stock has surged by 220.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- You can view the full E-House China Holdings Ratings Report.