JA Solar Holdings Co. ADR (JASO) Is Today's Dead Cat Bounce 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 JA Solar Holdings Co. ADR ( JASO) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified JA Solar Holdings Co. ADR as such a stock due to the following factors:

  • JASO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $28.1 million.
  • JASO has traded 260,905 shares today.
  • JASO is up 3.1% today.
  • JASO was down 5.8% yesterday.

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More details on JASO:

JA Solar Holdings Co., Ltd., through its subsidiaries, engages in the design, development, production, marketing, and sale of solar power products based on crystalline silicon technologies. The company's principal products include monocrystalline and multicrystalline solar cells and modules.

The average volume for JA Solar Holdings Co. ADR has been 2.2 million shares per day over the past 30 days. JA Solar Holdings Co. ADR has a market cap of $430.5 million and is part of the technology sector and electronics industry. Shares are up 17.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates JA Solar Holdings Co. ADR as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally high debt management risk.

Highlights from the ratings report include:
  • The gross profit margin for JA SOLAR HOLDINGS CO LTD is currently extremely low, coming in at 11.28%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, JASO's net profit margin of -12.98% significantly underperformed when compared to the industry average.
  • JASO's debt-to-equity ratio of 0.89 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 JASO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.66 is low and demonstrates weak liquidity.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, JA SOLAR HOLDINGS CO LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • JA SOLAR HOLDINGS CO LTD has improved earnings per share by 25.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JA SOLAR HOLDINGS CO LTD reported poor results of -$6.81 versus -$2.80 in the prior year. This year, the market expects an improvement in earnings (-$1.43 versus -$6.81).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 37.8% when compared to the same quarter one year prior, rising from -$60.31 million to -$37.51 million.

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