Kandi Technologies Group (KNDI) Is Weak On High 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 Kandi Technologies Group ( KNDI) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Kandi Technologies Group as such a stock due to the following factors:

  • KNDI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.3 million.
  • KNDI has traded 578,299 shares today.
  • KNDI is trading at 3.25 times the normal volume for the stock at this time of day.
  • KNDI is trading at a new low 5.01% 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 KNDI:

Kandi Technologies Group, Inc., through its subsidiaries, designs, develops, manufactures, and commercializes electric vehicles (EVs), EV parts, and off-road vehicles in the People's Republic of China and internationally. KNDI has a PE ratio of 41.7.

The average volume for Kandi Technologies Group has been 670,400 shares per day over the past 30 days. Kandi Technologies Group has a market cap of $559.1 million and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.54 and a short float of 19.8% with 14.20 days to cover. Shares are down 13.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Kandi Technologies Group 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 compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 4.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • KNDI's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Automobiles industry and the overall market on the basis of return on equity, KANDI TECHNOLOGIES GROUP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for KANDI TECHNOLOGIES GROUP is currently extremely low, coming in at 13.67%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 3.14% trails that of the industry average.
  • In its most recent trading session, KNDI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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