Canadian Solar (CSIQ) Highlighted As Today's Perilous Reversal 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 Canadian Solar ( CSIQ) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Canadian Solar as such a stock due to the following factors:

  • CSIQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $138.9 million.
  • CSIQ has traded 87,332 shares today.
  • CSIQ is down 3.6% today.
  • CSIQ was up 5.1% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in CSIQ with the Ticky from Trade-Ideas. See the FREE profile for CSIQ NOW at Trade-Ideas

More details on CSIQ:

Canadian Solar Inc., together with its subsidiaries, engages in the design, development, manufacture, and sale of solar power products worldwide. The company offers solar wafers, cells, and solar module products that convert sunlight into electricity for various uses. CSIQ has a PE ratio of 55.2. Currently there are 4 analysts that rate Canadian Solar a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Canadian Solar has been 4.6 million shares per day over the past 30 days. Canadian Solar has a market cap of $1.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 2.76 and a short float of 13% with 0.83 days to cover. Shares are down 2% year-to-date as of the close of trading on Wednesday.

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 Canadian Solar as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • CSIQ's very impressive revenue growth greatly exceeded the industry average of 1.5%. Since the same quarter one year prior, revenues leaped by 76.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CANADIAN SOLAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CANADIAN SOLAR INC turned its bottom line around by earning $0.56 versus -$4.52 in the prior year. This year, the market expects an improvement in earnings ($3.72 versus $0.56).
  • The gross profit margin for CANADIAN SOLAR INC is rather low; currently it is at 19.49%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, CSIQ's net profit margin of 4.03% is significantly lower than the industry average.
  • The debt-to-equity ratio is very high at 2.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CSIQ has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

P&G, GE and IBM Need to Innovate; Has Starbucks' Stock Grown Ice Cold?--ICYMI

P&G, GE and IBM Need to Innovate; Has Starbucks' Stock Grown Ice Cold?--ICYMI

Is Best Buy Sleeping With the Enemy With Amazon Partnership?

Is Best Buy Sleeping With the Enemy With Amazon Partnership?

Sprint, T-Mobile Might Have to Do More Than Make Promises to Get Deal Approved

Sprint, T-Mobile Might Have to Do More Than Make Promises to Get Deal Approved

Video: The S&P 500 Is Failing to Make New Highs

Video: The S&P 500 Is Failing to Make New Highs

Dow, S&P 500 and Nasdaq Finish Lower as Apple, P&G Slump

Dow, S&P 500 and Nasdaq Finish Lower as Apple, P&G Slump