Trade-Ideas LLC identified Ctrip.com International ( CTRP) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ctrip.com International as such a stock due to the following factors:

  • CTRP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $174.0 million.
  • CTRP has traded 827,880 shares today.
  • CTRP is trading at 3.36 times the normal volume for the stock at this time of day.
  • CTRP crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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

More details on CTRP:

Ctrip.com International, Ltd., together with its subsidiaries, provides travel services for hotel accommodations, transportation ticketing services, packaged tours, and corporate travel management in the People's Republic of China. CTRP has a PE ratio of 42. Currently there are 10 analysts that rate Ctrip.com International a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Ctrip.com International has been 2.9 million shares per day over the past 30 days. Ctrip.com International has a market cap of $9.7 billion and is part of the services sector and leisure industry. Shares are up 39% year-to-date as of the close of trading on Friday.

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 Ctrip.com International as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, feeble growth in the company's earnings per share and generally higher debt management risk.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 33.4%. Since the same quarter one year prior, revenues rose by 46.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Internet & Catalog Retail industry average. The net income increased by 5.9% when compared to the same quarter one year prior, going from $21.74 million to $23.03 million.
  • The gross profit margin for CTRIP.COM INTL LTD is currently very high, coming in at 71.11%. Regardless of CTRP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CTRP's net profit margin of 5.64% compares favorably to the industry average.
  • The debt-to-equity ratio is very high at 2.30 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, CTRP's quick ratio is somewhat strong at 1.31, demonstrating the ability to handle short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet & Catalog Retail industry and the overall market, CTRIP.COM INTL LTD'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.