China Finance Online (JRJC) Pops on Wednesday

NEW YORK (TheStreet) -- Micro-cap China Finance Online  (JRJC) popped during Wednesday's session, despite the absence of company news. By early afternoon, shares had jumped 17% to $7.08.

Since January 2013, shares have soared 347.5%.

JRJC Chart JRJC data by YCharts

TheStreet Ratings team reiterates CHINA FINANCE ONLINE CO -ADR as a Hold with a ratings score of C-. The team has this to say about their recommendation:

"We rate CHINA FINANCE ONLINE CO -ADR (JRJC) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JRJC's very impressive revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues leaped by 82.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • JRJC 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. To add to this, JRJC has a quick ratio of 1.77, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for CHINA FINANCE ONLINE CO -ADR is currently very high, coming in at 86.37%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -11.98% is in-line with the industry average.
  • CHINA FINANCE ONLINE CO -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, CHINA FINANCE ONLINE CO -ADR continued to lose money by earning -$0.54 versus -$0.89 in the prior year.
  • 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 Internet Software & Services industry and the overall market, CHINA FINANCE ONLINE CO -ADR's return on equity significantly trails that of both the industry average and the S&P 500.

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