Trade-Ideas: Jiayuan.com International (DATE) Is Today's Weak On High Relative Volume Stock

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

  • DATE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.2 million.
  • DATE has traded 209,918 shares today.
  • DATE is trading at 32.18 times the normal volume for the stock at this time of day.
  • DATE is trading at a new low 16.27% 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 DATE:

Jiayuan.com International Ltd. operates an online dating platform in the People's Republic of China. It operates through three segments: Online Services, Personalized Matchmaking Services, and Events and Other Services. The stock currently has a dividend yield of 3%. DATE has a PE ratio of 8. Currently there is 1 analyst that rates Jiayuan.com International a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Jiayuan.com International has been 138,200 shares per day over the past 30 days. Jiayuan.com International has a market cap of $248.3 million and is part of the technology sector and internet industry. Shares are up 95.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Jiayuan.com International 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, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 38.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • DATE 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, DATE has a quick ratio of 1.79, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its closing price of one year ago, DATE's share price has jumped by 33.21%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • JIAYUAN.COM INTL LTD's earnings per share declined by 28.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, JIAYUAN.COM INTL LTD reported lower earnings of $0.11 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($0.20 versus $0.11).
  • 46.80% is the gross profit margin for JIAYUAN.COM INTL LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, DATE's net profit margin of 9.12% is significantly lower than the industry average.

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