Trade-Ideas: JinkoSolar (JKS) 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 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 $42.1 million.
  • JKS has traded 345,212 shares today.
  • JKS is down 4.4% today.
  • JKS was up 6% 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 7.4. 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 2.1 million shares per day over the past 30 days. JinkoSolar has a market cap of $646.0 million and is part of the technology sector and electronics industry. Shares are down 24.2% year-to-date as of the close of trading on Tuesday.

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 JinkoSolar as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 18.6%. Since the same quarter one year prior, revenues rose by 35.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • JINKOSOLAR HOLDING CO 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, JINKOSOLAR HOLDING CO turned its bottom line around by earning $1.09 versus -$11.15 in the prior year. This year, the market expects an improvement in earnings ($2.43 versus $1.09).
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, JINKOSOLAR HOLDING CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for JINKOSOLAR HOLDING CO is rather low; currently it is at 22.63%. Regardless of JKS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, JKS's net profit margin of 5.67% is significantly lower than the industry average.
  • The debt-to-equity ratio is very high at 2.33 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, JKS maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.

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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