Today's Perilous Reversal Stock: Bitauto Holdings (BITA)

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

  • BITA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.7 million.
  • BITA has traded 1.1 million shares today.
  • BITA is down 3.6% today.
  • BITA was up 8.7% yesterday.

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More details on BITA:

Bitauto Holdings Limited provides Internet content and marketing services for the automotive industry primarily in the People's Republic of China. BITA has a PE ratio of 30.9. Currently there is 1 analyst that rates Bitauto Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Bitauto Holdings has been 344,800 shares per day over the past 30 days. Bitauto has a market cap of $689.4 million and is part of the technology sector and internet industry. Shares are up 124.1% year to date as of the close of trading on Friday.

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 Bitauto Holdings 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 notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 43.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BITA 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 2.63, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 122.7% when compared to the same quarter one year prior, rising from $4.10 million to $9.13 million.
  • The gross profit margin for BITAUTO HOLDINGS LTD -ADR is currently very high, coming in at 75.51%. 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 16.44% trails 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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