Today's Dead Cat Bounce Stock: IKang Healthcare Group (KANG)

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 iKang Healthcare Group ( KANG) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified iKang Healthcare Group as such a stock due to the following factors:

  • KANG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.6 million.
  • KANG has traded 215,970 shares today.
  • KANG is up 3.1% today.
  • KANG was down 8.7% yesterday.

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More details on KANG:

iKang Healthcare Group, Inc., together with its subsidiaries, provides preventive healthcare solutions in the People's Republic of China. KANG has a PE ratio of 175.

The average volume for iKang Healthcare Group has been 542,400 shares per day over the past 30 days. iKang Healthcare Group has a market cap of $1.4 billion and is part of the health care sector and health services industry. Shares are up 27.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates iKang Healthcare Group as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, premium valuation and poor profit margins.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, KANG's share price has jumped by 27.39%, exceeding the performance of the broader market during that same time frame.
  • The revenue growth greatly exceeded the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 43.5%. 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.
  • When compared to other companies in the Health Care Providers & Services industry and the overall market, IKANG HEALTHCARE GROUP -ADR's return on equity is below that of both the industry average and the S&P 500.
  • 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 Health Care Providers & Services industry. The net income has significantly decreased by 44.6% when compared to the same quarter one year ago, falling from -$5.66 million to -$8.18 million.

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