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 Ctrip.com International ( CTRP) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ctrip.com International as such a stock due to the following factors:
- CTRP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $332.2 million.
- CTRP has traded 1.8 million shares today.
- CTRP is trading at 1.89 times the normal volume for the stock at this time of day.
- CTRP crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend. EXCLUSIVE OFFER: Get the inside scoop on opportunities in CTRP with the Ticky from Trade-Ideas. See the FREE profile for CTRP NOW at Trade-Ideas More details on CTRP: Ctrip.com International, Ltd., together with its subsidiaries, provides travel service for hotel accommodations, airline tickets, packaged tours, and corporate travel management in the People's Republic of China. CTRP has a PE ratio of 50.2. Currently there are 9 analysts that rate Ctrip.com International a buy, no analysts rate it a sell, and 3 rate it a hold. The average volume for Ctrip.com International has been 3.8 million shares per day over the past 30 days. Ctrip.com International has a market cap of $5.1 billion and is part of the services sector and leisure industry. Shares are down 19.2% 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 Ctrip.com International as a buy. 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, solid stock price performance, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 34.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although CTRP's debt-to-equity ratio of 0.21 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
- Powered by its strong earnings growth of 81.81% and other important driving factors, this stock has surged by 71.78% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CTRP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for CTRIP.COM INTL LTD is currently very high, coming in at 75.40%. Regardless of CTRP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CTRP's net profit margin of 24.20% significantly outperformed against the industry.
- CTRIP.COM INTL LTD 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, CTRIP.COM INTL LTD reported lower earnings of $0.80 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.80).
- You can view the full Ctrip.com International 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.