SouFun Holdings (SFUN) Marked As A Dead Cat Bounce Stock

Trade-Ideas LLC identified SouFun Holdings ( SFUN) as a "dead cat bounce" (down big yesterday but up big today) 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 $26.9 million.
  • SFUN has traded 72,810 shares today.
  • SFUN is up 7.4% today.
  • SFUN was down 11.6% yesterday.

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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 7.7%. 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 5.9 million shares per day over the past 30 days. SouFun has a market cap of $2.1 billion and is part of the technology sector and internet industry. Shares are down 32.1% year-to-date as of the close of trading on Wednesday.

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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 robust revenue growth, reasonable valuation levels and notable return on equity. 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 poor profit margins.

Highlights from the ratings report include:
  • SFUN's revenue growth has slightly outpaced the industry average of 21.7%. Since the same quarter one year prior, revenues rose by 30.4%. 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.
  • 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 97.7% when compared to the same quarter one year ago, falling from $60.99 million to $1.41 million.
  • The gross profit margin for SOUFUN HLDGS LTD is currently lower than what is desirable, coming in at 25.70%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 0.56% significantly trails the industry average.

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