New Lifetime High For YY (YY)

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 YY ( YY) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified YY as such a stock due to the following factors:

  • YY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $151.4 million.
  • YY has traded 18,312 shares today.
  • YY is trading at a new lifetime high.

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More details on YY:

YY Inc., through its subsidiaries, operates an online social platform in the People's Republic of China. YY has a PE ratio of 68.8. Currently there are 5 analysts that rate YY a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for YY has been 1.5 million shares per day over the past 30 days. YY has a market cap of $5.1 billion and is part of the technology sector and internet industry. Shares are up 81.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates YY as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including premium valuation and generally higher debt management risk.

Highlights from the ratings report include:

  • YY's very impressive revenue growth greatly exceeded the industry average of 19.9%. Since the same quarter one year prior, revenues leaped by 101.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • YY INC -ADR 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, YY INC -ADR increased its bottom line by earning $1.34 versus $0.21 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $1.34).
  • Powered by its strong earnings growth of 130.76% and other important driving factors, this stock has surged by 125.17% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The debt-to-equity ratio of 1.04 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 6.36, which shows the ability to cover short-term cash needs.

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