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

Youku Tudou Inc ADR repr Class A

(

YOKU

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Youku Tudou Inc ADR repr Class A as such a stock due to the following factors:

  • YOKU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $144.0 million.
  • YOKU has traded 415,381 shares today.
  • YOKU is up 3.2% today.
  • YOKU was down 6.2% yesterday.

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More details on YOKU:

Youku Tudou Inc. operates as an Internet television company in the People's Republic of China. Its Internet television platform enables consumers to search, view, and share video content across various devices. Currently there are 4 analysts that rate Youku Tudou Inc ADR repr Class A a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Youku Tudou Inc ADR repr Class A has been 4.1 million shares per day over the past 30 days. Youku Tudou Inc ADR repr Class A has a market cap of $4.8 billion and is part of the technology sector and internet industry. Shares are down 11.3% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Youku Tudou Inc ADR repr Class A as a

hold

. 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 47.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • YOKU 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 3.33, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, YOUKU TUDOU INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for YOUKU TUDOU INC is currently lower than what is desirable, coming in at 27.85%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.31% is significantly below that of the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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