Bitauto Holdings (BITA) Strong On High Relative Volume Today

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

  • BITA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.9 million.
  • BITA has traded 270,573 shares today.
  • BITA is trading at 2.20 times the normal volume for the stock at this time of day.
  • BITA is trading at a new high 5.06% 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 BITA:

Bitauto Holdings Limited provides Internet content and marketing services for the automotive industry in the People's Republic of China. The company operates in four segments: bitauto.com Advertising Business, EP Platform Business, taoche.com Business, and Digital Marketing Solutions Business. BITA has a PE ratio of 114.6. Currently there are 4 analysts that rate Bitauto Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Bitauto Holdings has been 1.1 million shares per day over the past 30 days. Bitauto has a market cap of $2.6 billion and is part of the technology sector and internet industry. Shares are down 11.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bitauto Holdings 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, notable return on equity, compelling growth in net income and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • BITA's very impressive revenue growth greatly exceeded the industry average of 5.9%. Since the same quarter one year prior, revenues leaped by 89.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BITA 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. To add to this, BITA has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Internet Software & Services industry and the overall market, BITAUTO HOLDINGS LTD -ADR's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 46.3% when compared to the same quarter one year prior, rising from $15.69 million to $22.95 million.
  • Powered by its strong earnings growth of 37.83% and other important driving factors, this stock has surged by 83.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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