NEW YORK (TheStreet) -- After days of share losses, China-based net stocks are rebounding over Tuesday's session.YY data by YCharts
Shares turned sharply lower on Thursday after Securities and Exchange Commission Administrative Law Judge Cameron Elliot ruled Chinese units of accounting firms KPMG, Deloitte & Touche, PricewaterhouseCoopers and Ernst and Young were barred from auditing U.S.-listed companies for six months. The ruling was in connection to the firms' violation of the Sarbanes-Oxley Act after deliberately failing to provide audit papers for Chinese companies investigated for accounting fraud. The firms said they plan to file an appeal against the ruling.
On Monday, high-momentum internet stocks tumbled as investors took profits on fears of emerging markets weakness. As it stands, stocks in the developing world are off to their worst year since 2009.
TheStreet Ratings team rates YY INC -ADR as a Hold with a ratings score of C-. The team has this to say about their recommendation:
"We rate YY INC -ADR (YY) 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 solid stock price performance, notable return on equity and robust revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 227.27% and other important driving factors, this stock has surged by 379.47% over the past year, outperforming the rise in the S&P 500 Index during the same period.
- Compared to other companies in the Internet Software & Services industry and the overall market, YY INC -ADR's return on equity exceeds that of both the industry average and the S&P 500.
- YY 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 3.59, 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 275.9% when compared to the same quarter one year prior, rising from $5.63 million to $21.15 million.
- 49.00% is the gross profit margin for YY INC -ADR which we consider to be strong. Regardless of YY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, YY's net profit margin of 26.45% compares favorably to the industry average.
- You can view the full analysis from the report here: YY Ratings Report