Today's Weak On High Volume Stock: Sohu.com (SOHU)

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

  • SOHU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.0 million.
  • SOHU has traded 54,302 shares today.
  • SOHU is trading at 2.63 times the normal volume for the stock at this time of day.
  • SOHU is trading at a new low 5.05% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SOHU with the Ticky from Trade-Ideas. See the FREE profile for SOHU NOW at Trade-Ideas

More details on SOHU:

Sohu.com Inc. provides online media, search, and game services on personal computers (PCs), mobile devices, and tablets in the People's Republic of China. Currently there are 2 analysts that rate Sohu.com a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Sohu.com has been 588,900 shares per day over the past 30 days. Sohu.com has a market cap of $2.5 billion and is part of the technology sector and internet industry. The stock has a beta of 0.84 and a short float of 5% with 1.72 days to cover. Shares are up 22% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sohu.com as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 24.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • SOHU.COM INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SOHU.COM INC reported poor results of -$4.47 versus -$0.47 in the prior year. This year, the market expects an improvement in earnings (-$2.05 versus -$4.47).
  • The gross profit margin for SOHU.COM INC is rather high; currently it is at 67.61%. Regardless of SOHU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SOHU's net profit margin of -6.83% significantly underperformed when compared to the industry average.
  • 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 Internet Software & Services industry and the overall market, SOHU.COM INC's return on equity significantly trails that of both the industry average and the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

50 Stocks Goldman Sachs Thinks Can Triumph Over Wage Inflation

50 Stocks Goldman Sachs Thinks Can Triumph Over Wage Inflation

Video: Marriott CEO on Trade War Worries and China's Economy

Video: Marriott CEO on Trade War Worries and China's Economy

What Angela Merkel's Uncertain Political Future Means for Greece's Debt Woes

What Angela Merkel's Uncertain Political Future Means for Greece's Debt Woes

China Central Bank Governor Says Stay 'Calm and Rational' After Market Free Fall

China Central Bank Governor Says Stay 'Calm and Rational' After Market Free Fall

Trump Issues New Trade Threats, Apple, ZTE, GameStop - 5 Things You Must Know

Trump Issues New Trade Threats, Apple, ZTE, GameStop - 5 Things You Must Know