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 Canadian Solar ( CSIQ) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Canadian Solar as such a stock due to the following factors:

  • CSIQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.1 million.
  • CSIQ has traded 733,472 shares today.
  • CSIQ is down 3.2% today.
  • CSIQ was up 8.1% yesterday.

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More details on CSIQ:

Canadian Solar Inc., together with its subsidiaries, designs, develops, manufactures, and sells solar wafers, cells, and solar power products worldwide. The company operates in two segments, Module and Energy. CSIQ has a PE ratio of 5. Currently there are 5 analysts that rate Canadian Solar a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Canadian Solar has been 2.5 million shares per day over the past 30 days. Canadian Solar has a market cap of $1.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 3.80 and a short float of 6.4% with 1.29 days to cover. Shares are up 9.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Canadian Solar as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, attractive valuation levels, compelling growth in net income and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • CSIQ's very impressive revenue growth greatly exceeded the industry average of 11.4%. Since the same quarter one year prior, revenues leaped by 84.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CANADIAN SOLAR INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 1521.2% when compared to the same quarter one year prior, rising from $3.78 million to $61.33 million.
  • After a year of stock price fluctuations, the net result is that CSIQ's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

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