Trade-Ideas: Youku Tudou Inc ADR Repr Class A (YOKU) Is Today's

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 Youku Tudou Inc ADR repr Class A ( YOKU) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Youku Tudou Inc ADR repr Class A as such a stock due to the following factors:

  • YOKU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.9 million.
  • YOKU has traded 512,988 shares today.
  • YOKU is down 4.2% today.
  • YOKU was up 6.1% yesterday.

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More details on YOKU:

Yoqoo.com is an online video distribution and sharing platform in China. Currently there are 4 analysts that rate Youku Tudou Inc ADR repr Class A a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Youku Tudou Inc ADR repr Class A has been 3.5 million shares per day over the past 30 days. Youku Tudou Inc ADR repr Class A has a market cap of $5.0 billion and is part of the technology sector and internet industry. Shares are up 5.5% 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 Youku Tudou Inc ADR repr Class A as a hold. 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • YOKU's very impressive revenue growth greatly exceeded the industry average of 16.5%. Since the same quarter one year prior, revenues leaped by 73.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • YOKU 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 3.21, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for YOUKU TUDOU INC is rather high; currently it is at 51.27%. Regardless of YOKU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, YOKU's net profit margin of -25.49% significantly underperformed when compared to the industry average.
  • 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 Internet Software & Services industry. The net income has significantly decreased by 140.4% when compared to the same quarter one year ago, falling from -$14.93 million to -$35.88 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, YOUKU TUDOU INC's return on equity significantly trails that of both the industry average and the S&P 500.

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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