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

  • NTES has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.2 million.
  • NTES has traded 74,526 shares today.
  • NTES is trading at 4.67 times the normal volume for the stock at this time of day.
  • NTES is trading at a new high 7.00% 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.

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

More details on NTES:

NetEase, Inc., through its subsidiaries, operates an interactive online community in the People's Republic of China. It provides Chinese language content and services through its online games, Internet portal, e-mail, and wireless value-added service businesses. The stock currently has a dividend yield of 1.3%. NTES has a PE ratio of 19.0. Currently there are 6 analysts that rate NetEase a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for NetEase has been 507,700 shares per day over the past 30 days. NetEase has a market cap of $14.4 billion and is part of the technology sector and internet industry. Shares are up 13% 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 NetEase 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, solid stock price performance, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 34.2%. 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.
  • NTES's debt-to-equity ratio is very low at 0.09 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 3.86, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to its closing price of one year ago, NTES's share price has jumped by 53.33%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NTES should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for NETEASE INC is currently very high, coming in at 73.65%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.71% significantly outperformed against the industry average.

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