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 NII Holdings ( NIHD) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified NII Holdings as such a stock due to the following factors:
- NIHD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.6 million.
- NIHD has traded 5.3 million shares today.
- NIHD is down 11% today.
- NIHD was up 6.5% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in NIHD with the Ticky from Trade-Ideas. See the FREE profile for NIHD NOW at Trade-Ideas More details on NIHD: NII Holdings, Inc., through its subsidiaries, provides wireless communication services under the Nextel brand name to businesses and individuals in Mexico, Brazil, Argentina, Peru, and Chile. Currently there are 7 analysts that rate NII Holdings a buy, 4 analysts rate it a sell, and none rate it a hold. The average volume for NII Holdings has been 4.6 million shares per day over the past 30 days. NII has a market cap of $396.6 million and is part of the technology sector and telecommunications industry. The stock has a beta of 0.85 and a short float of 49.4% with 9.95 days to cover. Shares are down 65.2% 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 NII Holdings 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, disappointing return on equity, weak operating cash flow and generally high debt management risk. Highlights from the ratings report include:
- NII HOLDINGS 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, NII HOLDINGS INC swung to a loss, reporting -$4.15 versus $1.31 in the prior year. For the next year, the market is expecting a contraction of 55.7% in earnings (-$6.46 versus -$4.15).
- 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 Wireless Telecommunication Services industry. The net income has significantly decreased by 263.9% when compared to the same quarter one year ago, falling from -$82.42 million to -$299.94 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, NII HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$62.41 million or 156.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 50.90%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 372.22% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full NII Holdings Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.