Trade-Ideas LLC identified SouFun Holdings ( SFUN) as a "perilous reversal" (up big yesterday but down 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 $24.0 million.
- SFUN has traded 3.5 million shares today.
- SFUN is down 4.1% today.
- SFUN was up 11.3% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in SFUN with the Ticky from Trade-Ideas. See the FREE profile for SFUN NOW at Trade-Ideas 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. Currently there are 4 analysts that rate SouFun Holdings a buy, no analysts rate it a sell, and 1 rates it a hold. The average volume for SouFun Holdings has been 4.1 million shares per day over the past 30 days. SouFun has a market cap of $2.5 billion and is part of the technology sector and internet industry. Shares are down 13.4% year-to-date as of the close of trading on Wednesday. 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 SouFun Holdings as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and largely solid financial position with reasonable debt levels by most measures. 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 disappointing return on equity. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 20.6%. Since the same quarter one year prior, revenues rose by 34.8%. 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 0.95 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.34 is sturdy.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 26.09%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 147.36% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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 Software & Services industry and the overall market, SOUFUN HLDGS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for SOUFUN HLDGS LTD is currently lower than what is desirable, coming in at 28.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -12.90% is significantly below that of the industry average.
- You can view the full SouFun Holdings Ratings Report.
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