Perilous Reversal Stock: JinkoSolar (JKS)

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

  • JKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.6 million.
  • JKS has traded 147,862 shares today.
  • JKS is down 3.6% today.
  • JKS was up 9% yesterday.

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More details on JKS:

JinkoSolar Holding Co., Ltd., together with its subsidiaries, designs, develops, produces, and markets photovoltaic products in the People's Republic of China and internationally. JKS has a PE ratio of 8.8. Currently there are 4 analysts that rate JinkoSolar a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for JinkoSolar has been 1.8 million shares per day over the past 30 days. JinkoSolar has a market cap of $774.1 million and is part of the technology sector and electronics industry. Shares are down 6.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates JinkoSolar as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. 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:
  • JKS's very impressive revenue growth greatly exceeded the industry average of 8.9%. Since the same quarter one year prior, revenues leaped by 72.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 79.56% and other important driving factors, this stock has surged by 106.89% 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 gross profit margin for JINKOSOLAR HOLDING CO is rather low; currently it is at 23.99%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, JKS's net profit margin of 0.47% is significantly lower than the industry average.
  • The debt-to-equity ratio is very high at 2.15 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, JKS has a quick ratio of 0.67, 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.

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