Phoenix New Media (FENG) Is Today's Strong On High 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 Phoenix New Media ( FENG) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Phoenix New Media as such a stock due to the following factors:

  • FENG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.6 million.
  • FENG has traded 171,101 shares today.
  • FENG is trading at 6.87 times the normal volume for the stock at this time of day.
  • FENG is trading at a new high 6.09% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 FENG:

Phoenix New Media Limited provides content on an integrated platform across Internet, mobile, and TV channels in the People's Republic of China. FENG has a PE ratio of 14. Currently there is 1 analyst that rates Phoenix New Media a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Phoenix New Media has been 339,100 shares per day over the past 30 days. Phoenix New Media has a market cap of $561.0 million and is part of the technology sector and internet industry. Shares are up 0.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Phoenix New Media 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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 2.5%. 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.
  • FENG 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. Along with this, the company maintains a quick ratio of 3.45, which clearly demonstrates the ability to cover short-term cash needs.
  • 47.92% is the gross profit margin for PHOENIX NEW MEDIA LTD -ADR which we consider to be strong. Regardless of FENG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FENG's net profit margin of -3.06% significantly underperformed when compared to the industry average.
  • 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 Software & Services industry. The net income has significantly decreased by 118.1% when compared to the same quarter one year ago, falling from $10.00 million to -$1.81 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Internet Software & Services industry and the overall market, PHOENIX NEW MEDIA LTD -ADR's return on equity is below that of both the industry average and the S&P 500.

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