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Trade-Ideas: China Sunergy (CSUN) Is Today's "Perilous Reversal" Stock
Trade-Ideas LLC identified China Sunergy (CSUN) as a "perilous reversal" (up big yesterday but down big today) candidate
TheStreet Wire and Scott Olson
Oct 8, 2013 11:17 AM EDT
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified China Sunergy ( CSUN) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified China Sunergy as such a stock due to the following factors:
CSUN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.7 million.
CSUN has traded 2.6 million shares today.
CSUN is down 3% today.
CSUN was up 20.6% yesterday.
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More details on CSUN:
China Sunergy Co., Ltd., together with its subsidiaries, engages in the design, development, manufacture, and marketing of solar cells and modules in the People's Republic of China and internationally. Currently there are no analysts that rate China Sunergy a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for China Sunergy has been 192,600 shares per day over the past 30 days. China Sunergy has a market cap of $48.6 million and is part of the technology sector and electronics industry. Shares are up 130.3% year to date as of the close of trading on Friday.
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TheStreetRatings.com Analysis:
TheStreet Quant Ratings rates China Sunergy as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins and feeble growth in its earnings per share.
Highlights from the ratings report include:
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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 139.3% when compared to the same quarter one year ago, falling from -$9.55 million to -$22.86 million.
The gross profit margin for CHINA SUNERGY CO LTD is currently extremely low, coming in at 0.43%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -37.04% is significantly below that of the industry average.
CHINA SUNERGY CO 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CHINA SUNERGY CO LTD reported poor results of -$9.98 versus -$7.04 in the prior year. This year, the market expects an improvement in earnings (-$3.70 versus -$9.98).
Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.8%. Since the same quarter one year prior, revenues slightly dropped by 9.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
Compared to its closing price of one year ago, CSUN's share price has jumped by 370.53%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in CSUN do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
You can view the full China Sunergy Ratings Report.
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