China Recycling Energy (CREG) Surges to One-Year High

NEW YORK (TheStreet) -- China Recycling Energy  (CREG) surged more than 25% to a one-year high of $4.45 on Monday on higher-than-average volume.

More than 2 million shares had changed hands by just after 2:30 p.m., more than 20 times its average of 95,671.

The Chinese company, which develops waste energy recycling projects for industrial applications in China, rose alongside U.S. company MagneGas  (MNGA), which converts liquid waste into hydrogen-based fuel.

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TheStreet Ratings team rates CHINA RECYCLING ENERGY CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHINA RECYCLING ENERGY CORP (CREG) 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 robust revenue growth, solid stock price performance and attractive valuation levels. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CREG's very impressive revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues leaped by 432.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 366.66% and other important driving factors, this stock has surged by 193.51% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Commercial Services & Supplies industry and the overall market, CHINA RECYCLING ENERGY CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$53.42 million or 384.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: CREG Ratings Report

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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.

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