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

  • BONA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.8 million.
  • BONA has traded 188,723 shares today.
  • BONA is trading at 2.64 times the normal volume for the stock at this time of day.
  • BONA is trading at a new low 10.12% 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 BONA:

Bona Film Group Limited, through its subsidiaries, operates as an integrated film company in the People's Republic of China and internationally. The company operates through four segments: Film Distribution, Film Investment and Production, Talent Agency, and Movie Theater. BONA has a PE ratio of 86. Currently there is 1 analyst that rates Bona Film Group a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Bona Film Group has been 392,600 shares per day over the past 30 days. Bona Film Group has a market cap of $737.3 million and is part of the services sector and media industry. Shares are up 81.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bona Film Group as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • BONA's very impressive revenue growth greatly exceeded the industry average of 3.8%. Since the same quarter one year prior, revenues leaped by 107.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 37.0% when compared to the same quarter one year prior, rising from $1.36 million to $1.86 million.
  • Powered by its strong earnings growth of 200.00% and other important driving factors, this stock has surged by 106.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • Even though the current debt-to-equity ratio is 1.17, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Despite the fact that BONA's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.70 is low and demonstrates weak liquidity.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Media industry and the overall market on the basis of return on equity, BONA FILM GROUP LTD -ADR underperformed against that of the industry average and is significantly less than that of the S&P 500.

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