Trade-Ideas LLC identified

EFuture Information Technology

(

EFUT

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

  • EFUT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.5 million.
  • EFUT has traded 175,799 shares today.
  • EFUT is down 3.5% today.
  • EFUT was up 25.5% yesterday.

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More details on EFUT:

eFuture Information Technology Inc. provides software and services to retail and consumer goods industries in the People's Republic of China. The company develops and sells enterprise resource planning software; and provides solutions for distribution, retail, and logistics businesses. EFUT has a PE ratio of 15.

The average volume for EFuture Information Technology has been 283,500 shares per day over the past 30 days. EFuture Information Technology has a market cap of $48.6 million and is part of the technology sector and computer software & services industry. The stock has a beta of -0.51 and a short float of 0.5% with 0.01 days to cover. Shares are up 123.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates EFuture Information Technology as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 15.6%. Since the same quarter one year prior, revenues slightly increased by 5.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, EFUT's share price has jumped by 136.96%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EFUT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 42.71% is the gross profit margin for E-FUTURE INFORMATION TECH which we consider to be strong. 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 -18.35% is in-line with the industry average.
  • EFUT's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
  • E-FUTURE INFORMATION TECH's earnings per share declined by 11.1% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, E-FUTURE INFORMATION TECH turned its bottom line around by earning $0.27 versus -$0.29 in the prior year.

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