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

  • SFUN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.1 million.
  • SFUN has traded 756,626 shares today.
  • SFUN is trading at 2.48 times the normal volume for the stock at this time of day.
  • SFUN is trading at a new low 4.03% 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 SFUN:

SouFun Holdings Limited operates a real estate Internet portal, and home furnishing and improvement Websites in the People's Republic of China. The stock currently has a dividend yield of 5.4%. SFUN has a PE ratio of 2. Currently there are 3 analysts that rate SouFun Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for SouFun Holdings has been 7.1 million shares per day over the past 30 days. SouFun has a market cap of $2.9 billion and is part of the technology sector and internet industry. Shares are down 7.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SouFun Holdings 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 25.4%. 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.
  • SFUN's debt-to-equity ratio of 0.98 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SFUN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.70 is high and demonstrates strong liquidity.
  • The gross profit margin for SOUFUN HLDGS LTD is rather high; currently it is at 51.84%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SFUN's net profit margin of 7.66% is significantly lower than the industry average.
  • SOUFUN HLDGS 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, SOUFUN HLDGS LTD reported lower earnings of $0.58 versus $0.71 in the prior year. For the next year, the market is expecting a contraction of 74.8% in earnings ($0.15 versus $0.58).
  • 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 76.3% when compared to the same quarter one year ago, falling from $68.20 million to $16.17 million.

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