I have identified 5 stocks experiencing high volume trading recently. Our list includes an internet television provider from China, a social networking internet platform from China, a broadcasting satellite radio system, a REIT and a professional social media network company.
Youku.com, Inc. (NYSE:YOKU) – The company started the week trading around $20.27 per share and fell to around $14.89 per share, but ended the week trading with a sizable increase around $18.09 per share. Moreover, YOKU has an unattractive debt to equity ratio of 2.13, which is higher than its competitors, Baidu, Inc. (NASDAQ:BIDU) and Sohu.com, Inc. (NASDAQ:SOHU) which have a debt to equity ratio of 1.02 and 0.00, respectively. In addition, YOKU has a poor return on equity of -28.71%, compared to BIDU at 53.58% and SOHU at 21.14%, respectively.
Currently, YOKU and its competitors are not offering any dividends to its shareholders. However, BIDU and SOHU are showing increases in their price earnings, whereas, YOKU remains stable and trading lower than its peak of around $64.30 per share back in April of 2011. Moreover, YOKU has a lower gross margin of 32.15% compared to BIDU at 80.51% and SOHU at 73.59%, respectively. Furthermore, YOKU is trailing behind in market share compared to its competitors.
However, Youku has expanded its online video beyond the web with a new desktop client and smart remote, which enable users to watch high quality professional content across multiple Internet enabled devices from desktops to Android mobile phones. This is great news for the company to help increase their price to sales ratio. However, due to the fluctuation in the stock, the company does not seem to show strength in its price earning appreciation because the company’s 5 year price earning to growth (PEG) is -3.31 compared to its competitors, BIDU at 0.90 and SOHU at 0.71, respectively.
Renren, Inc. (NYSE:RENN) – The company had a minimal increase on the last day of trading from the beginning of the week around $5.07 per share to around $5.49 per share. However, RENN is expected to increase its share price with a 1 year target estimate of around $8.53 per share. Currently, RENN and its competitors, Baidu, Inc. (BIDU) and Sina Corp. (NASDAQ:SINA) do not offer any dividends to its shareholders. Moreover, RENN has a 0.00 debt to equity ratio compared to its competitors BIDU and SINA of 2.13 and 1.02, respectively.
In addition, RENN has an attractive gross margin of 79.37%, whereas, BIDU and SINA have a gross margin of 80.51% and 57.10%, respectively. Furthermore, RENN has just announced an acquisition of online video site, 56.com, which will help increase sales and users to its site. Moreover, RENN has an attractive price to sales ratio of 17.65, which makes it a good buy for a price earning appreciation investment.
Sirisu XM Radio Inc. (NASDAQ:SIRI) – The company has not had a good cycle since the end of 2005 with shares trading at a low of around $1.50 per share at the end of last week. However, SIRI has an attractive gross margin of 61.79% over its competitors, Cumulus Media Inc. (NASDAQ:CMLS) and Westwood One Inc. (NASDAQ:WWON) of 40.90% and 3.10%, respectively. Moreover, SIRI and Subaru of America announced on October 4, 2011 that Subaru will offer satellite radio on all models beginning with the 2012 model year vehicles.
Moreover, all 2012 model year Legacy and Outback Limited models will come standard with factory installed satellite radio. The joint venture will help to increase the revenue for SIRI and increase its price to sales ratio, which is currently at 2.01 compared to its competitors, CMLS at 1.29 and WWON at 0.58, respectively. Moreover, revenue for SIRI is expected to increase at 6.40% and price earning to growth within the next 5 years is expected to increase at 0.84. Currently, the company does not offer any dividends to its shareholders.
Moreover, the price earning to growth ratio may not increase quicker than anticipated largely due to new vehicle models providing adapters for the iPod and MP3 players, which allow consumers to sync downloaded music to their vehicle’s radio system. Therefore, due to the other popular brand vehicles offering an alternative to satellite radio such as synchronizing downloaded music from an iPod and an MP3 player, the sales may not be significant to increase SIRI’s market share. Thus, SIRI would not be considered a good investment for price earning appreciation.
Chimera Investment Corp. (NYSE:CIM) – The company has not had any significant increases in its share prices since February 2008, mainly due to the status of the real estate market. Moreover, the company is trading at around $2.66 per share. Furthermore, CIM is paying dividends to its shareholders at $0.13 a share for the 3rd Quarter of 2011. However, Annaly Capital Management, Inc. (NYSE:NLY) is paying $0.65 a share in dividends. Moreover, CIM has a higher return on equity of 13.54% over NLY of 3.54%, which could help drive CIM to pay more dividends per share to its shareholders.
As a result, CIM has the possibility of becoming a good investment for income. Furthermore, both companies have an outstanding gross margin percentage of 100%, respectively. Moreover, according to Seeking Alpha, Bank of America announced on August 29, 2011 that it lowered the price objective on CIM from $4.25 to $3.15. In addition, revenue growth is not expected to increase, but decrease by 1.70% for the upcoming quarter.
However, the price earnings to growth within the next 5 years is expected to have a small increase of 1.71 compared to NLY at 3.37, but CIM has a better gross margin of 83.93% compared to NLY of 65.51%. Lastly, due to the trend in the consistency of the company trading at a stable share price I do not anticipate the share price to increase significantly for a large return on investment. Therefore, I do not consider this company a good investment.
LinkedIn Corporation (LNKD) – The company may appear to be an overvalued stock with its share price currently trading at around $76.48 per share for a new company that recently went public. However, LNKD shows an attractive price earnings to growth ratio with five years of 43.34. Moreover, LNKD’s revenue growth is expected to increase 120.50% with a price earnings ratio of 427.26. The company is currently not paying any dividends to its shareholders.
Furthermore, LNKD has a zero debt to equity ratio and a good return on equity ratio of 8.47%. In addition, LNKD has an attractive gross margin of 82.74%. Moreover, LNKD has no competitors on the open market, but the LNKD has one growing competitor, Viadeo, which is based out of Europe. LKND currently has over 90 million users compared to Viadeo with over 35 million users. Moreover, Viadeo is expanding its business into the United States where it plans to open an office in San Francisco, California.
Lastly, due to the recent decrease in share price from around $109.97 per share to around $76.48 per share from July 2011, I would recommend waiting for the share price to increase before purchasing stock in LNKD.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.