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 United Online ( UNTD) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified United Online as such a stock due to the following factors:
- UNTD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.5 million.
- UNTD has traded 50,937 shares today.
- UNTD is down 4.3% today.
- UNTD was up 29.5% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in UNTD with the Ticky from Trade-Ideas. See the FREE profile for UNTD NOW at Trade-Ideas More details on UNTD: The company's online loyalty marketing service, MyPoints (www.mypoints.com), provides advertisers with an effective means to reach a large online audience with targeted marketing campaigns. Currently there are 2 analysts that rate United Online a buy, no analysts rate it a sell, and 1 rates it a hold. The average volume for United Online has been 523,700 shares per day over the past 30 days. United Online has a market cap of $150.8 million and is part of the services sector and specialty retail industry. The stock has a beta of 1.10 and a short float of 9.8% with 1.35 days to cover. 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 United Online as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- UNITED ONLINE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, UNITED ONLINE INC reported lower earnings of $0.91 versus $3.92 in the prior year. For the next year, the market is expecting a contraction of 211.0% in earnings (-$1.01 versus $0.91).
- 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 967.1% when compared to the same quarter one year ago, falling from $5.45 million to -$47.23 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, UNITED ONLINE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 76.77%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 950.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The gross profit margin for UNITED ONLINE INC is rather high; currently it is at 52.02%. Regardless of UNTD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, UNTD's net profit margin of -27.03% significantly underperformed when compared to the industry average.
- You can view the full United Online 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.