Trade-Ideas LLC identified

Autohome

(

ATHM

) 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 Autohome as such a stock due to the following factors:

  • ATHM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.2 million.
  • ATHM has traded 313,409 shares today.
  • ATHM traded in a range 248.8% of the normal price range with a price range of $2.68.
  • ATHM traded above its daily resistance level (quality: 42 days, meaning that the stock is crossing a resistance level set by the last 42 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 ATHM:

Autohome Inc. operates as an online destination for automobile consumers in the People's Republic of China. ATHM has a PE ratio of 18. Currently there are 5 analysts that rate Autohome a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Autohome has been 1.0 million shares per day over the past 30 days. Autohome has a market cap of $3.2 billion and is part of the technology sector and internet industry. Shares are down 18.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Autohome as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • Compared to other companies in the Internet Software & Services industry and the overall market, AUTOHOME INC -ADR's return on equity exceeds that of both the industry average and the S&P 500.
  • ATHM's very impressive revenue growth greatly exceeded the industry average of 7.1%. Since the same quarter one year prior, revenues leaped by 70.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ATHM 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. Along with this, the company maintains a quick ratio of 3.70, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for AUTOHOME INC -ADR is currently very high, coming in at 85.62%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 35.41% significantly outperformed against the industry average.
  • ATHM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.60%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, ATHM is still more expensive than most of the other companies in its industry.

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