Trade-Ideas: E-House China Holdings (EJ) Is Today's

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 E-House China Holdings ( EJ) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified E-House China Holdings as such a stock due to the following factors:

  • EJ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.4 million.
  • EJ has traded 111,140 shares today.
  • EJ is up 4% today.
  • EJ was down 5.3% yesterday.

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More details on EJ:

E-House (China) Holdings Limited, through its subsidiaries, operates as a real estate services company primarily in the People's Republic of China. The stock currently has a dividend yield of 1.9%. EJ has a PE ratio of 25.1. Currently there are 3 analysts that rate E-House China Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for E-House China Holdings has been 2.2 million shares per day over the past 30 days. E-House China has a market cap of $1.3 billion and is part of the financial sector and real estate industry. Shares are down 40.1% year-to-date as of the close of trading on Thursday.

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 E-House China Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, reasonable valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 28.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EJ's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.00, which clearly demonstrates the ability to cover short-term cash needs.
  • E-HOUSE CHINA HOLDINGS -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 two years. We feel that this trend should continue. During the past fiscal year, E-HOUSE CHINA HOLDINGS -ADR turned its bottom line around by earning $0.36 versus -$0.59 in the prior year. This year, the market expects an improvement in earnings ($0.73 versus $0.36).
  • The gross profit margin for E-HOUSE CHINA HOLDINGS -ADR is rather high; currently it is at 65.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.38% trails the industry average.

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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