Today's Perilous Reversal Stock: China Biologic Products (CBPO)

Trade-Ideas LLC identified China Biologic Products ( CBPO) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified China Biologic Products as such a stock due to the following factors:

  • CBPO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.8 million.
  • CBPO has traded 50,496 shares today.
  • CBPO is down 3.3% today.
  • CBPO was up 10.5% yesterday.

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More details on CBPO:

China Biologic Products, Inc. engages in the research, development, manufacture, and sale of human plasma-based biopharmaceutical products to hospitals and inoculation centers in the People's Republic of China. CBPO has a PE ratio of 36. Currently there are 3 analysts that rate China Biologic Products a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for China Biologic Products has been 248,600 shares per day over the past 30 days. China Biologic has a market cap of $3.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.96 and a short float of 3.2% with 2.37 days to cover. Shares are down 16.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates China Biologic Products as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • CBPO's revenue growth has slightly outpaced the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 21.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CBPO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.71, which clearly demonstrates the ability to cover short-term cash needs.
  • CHINA BIOLOGIC PRODUCTS INC has improved earnings per share by 8.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CHINA BIOLOGIC PRODUCTS INC increased its bottom line by earning $3.27 versus $2.72 in the prior year. This year, the market expects an improvement in earnings ($4.26 versus $3.27).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Biotechnology industry average. The net income increased by 13.1% when compared to the same quarter one year prior, going from $23.16 million to $26.20 million.

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