Sony (SNE) 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 Sony ( SNE) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sony as such a stock due to the following factors:

  • SNE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.2 million.
  • SNE has traded 611,454 shares today.
  • SNE is down 3% today.
  • SNE was up 5.1% yesterday.

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More details on SNE:

Sony Corporation designs, develops, manufactures, and sells electronic equipment, instruments, and devices for consumer, professional, and industrial markets worldwide. The stock currently has a dividend yield of 1.2%. SNE has a PE ratio of 5.0. Currently there are 3 analysts that rate Sony a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Sony has been 2.4 million shares per day over the past 30 days. Sony has a market cap of $18.2 billion and is part of the consumer goods sector and consumer durables industry. Shares are up 1.4% 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 Sony as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 11.0%. Since the same quarter one year prior, revenues rose by 41.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 59.15% to $4,090.97 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 38.87%.
  • The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that SNE's debt-to-equity ratio is low, the quick ratio, which is currently 0.61, displays a potential problem in covering short-term cash needs.
  • 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 Household Durables industry. The net income has significantly decreased by 228.4% when compared to the same quarter one year ago, falling from $1,044.22 million to -$1,340.40 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Household Durables industry and the overall market, SONY CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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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