Changyou.com (CYOU) Strong On High Relative Volume Today

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

  • CYOU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.1 million.
  • CYOU has traded 210,928 shares today.
  • CYOU is trading at 32.07 times the normal volume for the stock at this time of day.
  • CYOU is trading at a new high 7.36% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 CYOU:

Changyou.com Limited develops and operates online games in the People's Republic of China. Currently there are no analysts that rate Changyou.com a buy, 3 analysts rate it a sell, and 1 rates it a hold.

The average volume for Changyou.com has been 148,400 shares per day over the past 30 days. Changyou.com has a market cap of $1.2 billion and is part of the technology sector and computer software & services industry. Shares are down 13.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Changyou.com as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 16.7%. Since the same quarter one year prior, revenues slightly increased by 4.5%. 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 Software industry and the overall market, CHANGYOU.COM LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.68 is very high and demonstrates very strong liquidity.
  • CHANGYOU.COM LTD 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, CHANGYOU.COM LTD swung to a loss, reporting -$0.06 versus $5.03 in the prior year. This year, the market expects an improvement in earnings ($3.97 versus -$0.06).
  • CYOU has underperformed the S&P 500 Index, declining 14.20% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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