Strong On High Relative Volume: China Finance Online (JRJC)

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 China Finance Online ( JRJC) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified China Finance Online as such a stock due to the following factors:

  • JRJC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.8 million.
  • JRJC has traded 2.5 million shares today.
  • JRJC is trading at 16.70 times the normal volume for the stock at this time of day.
  • JRJC is trading at a new high 22.05% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on JRJC:

China Finance Online Co., Limited provides integrated financial information and services in the People's Republic of China and Hong Kong.

The average volume for China Finance Online has been 4.2 million shares per day over the past 30 days. China Finance Online has a market cap of $122.5 million and is part of the technology sector and internet industry. Shares are down 12.4% year-to-date as of the close of trading on Monday.

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 China Finance Online as a sell. The area that we feel has been the company's primary weakness has been its disappointing return on equity.

Highlights from the ratings report include:
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, CHINA FINANCE ONLINE CO -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA FINANCE ONLINE CO -ADR is currently very high, coming in at 76.75%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -8.56% is in-line with the industry average.
  • CHINA FINANCE ONLINE CO -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. During the past fiscal year, CHINA FINANCE ONLINE CO -ADR continued to lose money by earning -$0.41 versus -$0.54 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 54.0% when compared to the same quarter one year prior, rising from -$4.32 million to -$1.99 million.
  • This stock has increased by 129.71% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in JRJC do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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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