Trade-Ideas LLC identified

Jumei International

(

JMEI

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

  • JMEI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.8 million.
  • JMEI has traded 79,176 shares today.
  • JMEI is down 4% today.
  • JMEI was up 8.4% yesterday.

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More details on JMEI:

Jumei International Holding Limited operates as an online retailer of beauty products in the People's Republic of China. The company offers beauty products, such as cosmetics, skin care, cosmetic applicators, fragrance, and body care products; and beauty products for men, and baby and children. JMEI has a PE ratio of 22. Currently there are 2 analysts that rate Jumei International a buy, no analysts rate it a sell, and 3 rate it a hold.

TheStreet Recommends

The average volume for Jumei International has been 2.5 million shares per day over the past 30 days. Jumei International has a market cap of $1.4 billion and is part of the services sector and specialty retail industry. Shares are down 21.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Jumei International as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:

  • Looking at the price performance of JMEI's shares over the past 12 months, there is not much good news to report: the stock is down 59.37%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Internet & Catalog Retail industry average, but is greater than that of the S&P 500. The net income has decreased by 10.6% when compared to the same quarter one year ago, dropping from $19.18 million to $17.14 million.
  • The gross profit margin for JUMEI INTL HOLDING LTD -ADR is currently lower than what is desirable, coming in at 29.97%. It has decreased significantly from the same period last year. Regardless of the weak results of the gross profit margin, the net profit margin of 5.56% is above that of the industry average.
  • JUMEI INTL HOLDING LTD -ADR's earnings per share declined by 15.4% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.49 versus $0.45).
  • JMEI's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JMEI has a quick ratio of 2.00, which demonstrates the ability of the company to cover short-term liquidity needs.

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