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.

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 $13.1 million.
  • EJ has traded 218,978 shares today.
  • EJ is up 3.1% today.
  • EJ was down 6.1% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in EJ with the Ticky from Trade-Ideas. See the FREE profile for EJ NOW at Trade-Ideas

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 6.4%. EJ has a PE ratio of 22.2. Currently there are 2 analysts that rate E-House China Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for E-House China Holdings has been 1.3 million shares per day over the past 30 days. E-House China has a market cap of $815.4 million and is part of the financial sector and real estate industry. Shares are down 25% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates E-House China Holdings as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.4%. Since the same quarter one year prior, revenues rose by 11.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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 2.90, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for E-HOUSE CHINA HOLDINGS -ADR is rather high; currently it is at 64.39%. Regardless of EJ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EJ's net profit margin of 2.32% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Management & Development industry. The net income has significantly decreased by 73.5% when compared to the same quarter one year ago, falling from $19.23 million to $5.09 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.75%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 78.57% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, EJ is still more expensive than most of the other companies in its industry.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

null