Today's Perilous Reversal Stock: JinkoSolar (JKS)

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

  • JKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.3 million.
  • JKS has traded 323,791 shares today.
  • JKS is down 3% today.
  • JKS was up 9.3% yesterday.

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More details on JKS:

JinkoSolar Holding Co., Ltd., together with its subsidiaries, engages in designing, developing, producing, and marketing photovoltaic products in the People's Republic of China and internationally. Currently there is 1 analyst that rates JinkoSolar a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for JinkoSolar has been 1.8 million shares per day over the past 30 days. JinkoSolar has a market cap of $721.6 million and is part of the industrial goods sector and industrial industry. Shares are up 332.4% year-to-date as of the close of trading on Tuesday.

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 JinkoSolar as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 3.00 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, JKS has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for JINKOSOLAR HOLDING CO is rather low; currently it is at 22.27%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, JKS's net profit margin of 5.24% is significantly lower than the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, JINKOSOLAR HOLDING CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • JINKOSOLAR HOLDING CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JINKOSOLAR HOLDING CO swung to a loss, reporting -$11.15 versus $1.39 in the prior year. This year, the market expects an improvement in earnings ($1.98 versus -$11.15).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 271.3% when compared to the same quarter one year prior, rising from -$9.85 million to $16.88 million.

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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