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 strong on high relative volume 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 $12.8 million.
  • EJ has traded 430,848 shares today.
  • EJ is trading at 5.69 times the normal volume for the stock at this time of day.
  • EJ is trading at a new high 5.04% 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 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 8.4%. EJ has a PE ratio of 23.1. 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 $889.5 million and is part of the financial sector and real estate industry. Shares are down 17.1% year-to-date as of the close of trading on Thursday.

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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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 22.3%. 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 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EJ has a quick ratio of 2.40, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for E-HOUSE CHINA HOLDINGS -ADR is rather high; currently it is at 69.10%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, EJ's net profit margin of 5.95% significantly trails the industry average.
  • E-HOUSE CHINA HOLDINGS -ADR's earnings per share declined by 45.5% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, E-HOUSE CHINA HOLDINGS -ADR reported lower earnings of $0.26 versus $0.36 in the prior year. For the next year, the market is expecting a contraction of 3.8% in earnings ($0.25 versus $0.26).
  • 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 41.4% when compared to the same quarter one year ago, falling from $31.75 million to $18.60 million.

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