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

  • LONG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.1 million.
  • LONG has traded 51,674 shares today.
  • LONG is trading at 8.91 times the normal volume for the stock at this time of day.
  • LONG is trading at a new low 7.55% 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 LONG:

eLong, Inc. operates as a mobile and online travel service provider in the People's Republic of China. Currently there is 1 analyst that rates eLong a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for eLong has been 101,600 shares per day over the past 30 days. eLong has a market cap of $806.6 million and is part of the technology sector and internet industry. Shares are up 25.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates eLong as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, LONG's share price has jumped by 45.32%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • LONG 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, LONG has a quick ratio of 1.73, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The revenue fell significantly faster than the industry average of 19.0%. Since the same quarter one year prior, revenues fell by 13.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ELONG INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ELONG INC reported poor results of -$1.22 versus -$0.80 in the prior year. For the next year, the market is expecting a contraction of 176.2% in earnings (-$3.37 versus -$1.22).
  • 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 Internet & Catalog Retail industry. The net income has significantly decreased by 412.3% when compared to the same quarter one year ago, falling from -$5.69 million to -$29.15 million.

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