Autohome (ATHM) Highlighted As Weak On High Volume

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

  • ATHM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $96.2 million.
  • ATHM has traded 147,304 shares today.
  • ATHM is trading at 2.03 times the normal volume for the stock at this time of day.
  • ATHM is trading at a new low 5.02% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 ATHM:

Autohome Inc. operates as an online destination for automobile consumers in the People's Republic of China. ATHM has a PE ratio of 45.2. Currently there are 4 analysts that rate Autohome a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Autohome has been 971,000 shares per day over the past 30 days. Autohome has a market cap of $5.8 billion and is part of the technology sector and internet industry. Shares are up 44.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Autohome as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity and robust revenue growth. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 59.09% and other important driving factors, this stock has surged by 59.35% over the past year, outperforming the rise in the S&P 500 Index during the same period.
  • Compared to other companies in the Internet Software & Services industry and the overall market, AUTOHOME INC -ADR's return on equity exceeds that of both the industry average and the S&P 500.
  • ATHM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.27, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for AUTOHOME INC -ADR is currently very high, coming in at 84.89%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 33.78% significantly outperformed against the industry average.

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