Trade-Ideas LLC identified

Youku Tudou

(

YOKU

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Youku Tudou 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 $22.6 million.
  • YOKU has traded 93,406 shares today.
  • YOKU is down 3.3% today.
  • YOKU was up 10.9% 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 users to search, view, and share video content across various devices. Currently there are 3 analysts that rate Youku Tudou a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Youku Tudou has been 2.0 million shares per day over the past 30 days. Youku Tudou has a market cap of $3.4 billion and is part of the technology sector and internet industry. Shares are up 9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Youku Tudou as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • YOUKU TUDOU INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, YOUKU TUDOU INC reported poor results of -$0.71 versus -$0.58 in the prior year. For the next year, the market is expecting a contraction of 898.6% in earnings (-$7.09 versus -$0.71).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 139.8% when compared to the same quarter one year ago, falling from -$22.99 million to -$55.15 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. 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.
  • 49.41% is the gross profit margin for YOUKU TUDOU INC which we consider to be strong. Regardless of YOKU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, YOKU's net profit margin of -21.24% significantly underperformed when compared to the industry average.
  • After a year of stock price fluctuations, the net result is that YOKU's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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