Trade-Ideas: Ctrip.com International (CTRP) Is Today's Momo Momentum Stock

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 momo momentum 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 $376.6 million.
  • CTRP has a PE ratio of 63.2.
  • CTRP is currently in the upper 30% of its 1-year range.
  • CTRP is in the upper 25% of its 20-day range.
  • CTRP is in the upper 35% of its 5-day range.
  • CTRP is currently trading above yesterday's high.
  • CTRP has experienced a gap between today's open and yesterday's close of 2.4%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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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 63.2. Currently there are 10 analysts that rate Ctrip.com International a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Ctrip.com International has been 4.7 million shares per day over the past 30 days. Ctrip.com International has a market cap of $6.4 billion and is part of the services sector and leisure industry. Shares are down 0.7% year-to-date as of the close of trading on Monday.

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, solid stock price performance, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 35.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 148.50% over the past year, a rise that has exceeded that of the S&P 500 Index. 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 72.70%. 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 18.11% significantly outperformed against the industry.
  • CTRP's debt-to-equity ratio of 0.75 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CTRP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.05 is high and demonstrates strong liquidity.
  • CTRIP.COM INTL LTD's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CTRIP.COM INTL LTD increased its bottom line by earning $1.10 versus $0.80 in the prior year. For the next year, the market is expecting a contraction of 20.0% in earnings ($0.88 versus $1.10).

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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