Trina Solar (TSL): Today's Weak 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 Trina Solar ( TSL) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Trina Solar as such a stock due to the following factors:

  • TSL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18 million
  • TSL has traded 336,795 shares today
  • TSL is trading at 2.03 times the normal volume for the stock at this time of day
  • TSL is trading at a new low 3.0015807189650001163272463600151240825653076171875 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 TSL:

Trina Solar Limited operates as an integrated solar-power products manufacturer and solar system developer in the People's Republic of China, Europe, the United States, and other Asia Pacific regions. TSL has a PE ratio of 49. Currently there are five analysts that rate Trina Solar a buy, no analysts rate it a sell, and three rate it a hold.

The average volume for Trina Solar has been 2.2 million shares per day over the past 30 days. Trina Solar has a market cap of $1.18 billion and is part of the technology sector and electronics industry. Shares are up 36.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Trina Solar as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and generally higher debt management risk.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 25.5%. 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.
  • TRINA SOLAR LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, TRINA SOLAR LTD turned its bottom line around by earning $0.78 versus -$1.02 in the prior year. This year, the market expects an improvement in earnings ($0.97 versus $0.78).
  • 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 47.5% when compared to the same quarter one year ago, falling from $26.51 million to $13.91 million.
  • The gross profit margin for TRINA SOLAR LTD is rather low; currently it is at 17.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.49% significantly trails the industry average.

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