Is Now the Time to Buy China Automotive Systems, Inc. (NASDAQ:CAAS)? Analysts Take Aim

Traders may be using technical analysis to help spot ideal entry and exit points. One idea behind technical analysis is that historical price movement trends have the ability to repeat themselves. Technical analysis involves the use of chart patterns to examine market movements and to help define trends. Trends in the stock market are not always easy to spot. Many chartists will strive to determine whether the trend is up, down, or sideways. After defining a trend, the technical analyst may look to see what type of timeframe the trend encompasses. Some traders will look to identify whether the trend is major or long-term, short-term, or intermediate. Being able to decipher what the data is saying may assist the trader with finding potential entry and exit points on a particular trade. There are many different indicators that can be employed when undertaking technical analysis. Many traders will do numerous chart studies to find out which indicator or indicators tend to project the most relevant trading assistance. Learning how to spot these trends might help the trader develop specific charting skills that will hopefully lead to future market success.

Some investors may be lamenting the fact that they have not taken full advantage of the long bull run. There are plenty of pundits that are calling for a sharp stock market decline, but there are also many who believe that the ceiling has been raised and there is much more room for stocks to go higher. Getting into the market at these levels may be holding some investors back from jumping into the fray, and nobody can be sure which way the momentum will swing as we near the end of the year. The next round of company earnings reports should provide some good information about future prospects. Investors will be closely watching to see which sectors are running at full speed and which ones are lagging. 

China Automotive Systems, Inc. (NASDAQ:CAAS), of the Consumer Goods sector recently touched $2.29 based on a recent trade, indicating movement of 14.50%. Analysts are predicting earnings per share growth of -87.30% for the current year. The earnings per share growth over the next five years are expected to be 10.00%. China Automotive Systems, Inc. has had earnings per share growth of -39.90% over the past five years. 

Currently the return on equity is 0.40% and its debt to equity is 0.46. China Automotive Systems, Inc. has a total market cap of $74.15, a gross margin of 12.40% while the profit margin is 0.30% and the ROI is -0.30%.


The stats on China Automotive Systems, Inc. (NASDAQ:CAAS) are currently as follows. The weekly performance is 23.78%, and the quarterly performance is at 4.81%. The monthly performance is 15.66% and the yearly performance is 15.66%. The performance for Year to Date (YTD) is -6.15%.

China Automotive Systems, Inc. has posted a trailing 12 months earnings per share of $0.04 and the earnings per share growth for this year is expected to be -87.30%. The ROI is -0.30% and the return on equity for China Automotive Systems, Inc. stated earlier, is currently at 0.40% .The return on assets (ROA) for China Automotive Systems, Inc. is 0.20%. 

Earnings per share (EPS) the amount of income that “belongs” to each share of common stock. This is a valuable tool that investors use to determine the value and projected value of a stock.  Earnings per share is generally reported in annualized form from the most recent fiscal year. To determine the value, the average number of shares outstanding is usually calculated by averaging the number of shares at the beginning of the fiscal period and the number of shares at the end of the period. 

Price Earnings Ratio

The price/earnings ratio (P/E) for China Automotive Systems, Inc. is 60.26 and the forward P/E ratio stands at 7.90. The price to sales growth is 0.16. The price/earnings ratio (P/E) is a market prospect ratio which calculates the value of a stock relative to its earnings. On other words, the P/E ratio is and indicator of what investors are will to pay for a stock relative to its earnings.  A firm with a high P/E ratio typically indicates that investors are willing to pay a premium for the stock and higher performance in future quarters would be anticipated. Going a step further we can also look at the PEG ratio of a company.  A stock’s price/earnings ratio divided by its year-over-year earnings growth rate. In general, the lower the PEG, the better the value, because the investor would be paying less for each unit of earnings growth.


The technical stats for China Automotive Systems, Inc. are as follows. China Automotive Systems, Inc. (NASDAQ:CAAS) is trading 34.71% away from the stock’s 52-week low and -54.20% off of the 52-week high. Current levels place the company 21.26% away from it’s 20-day simple moving average. The average volume stands around 66733. Trading volume is a hugely important consideration for any investor.  By watching how many shares are trading hands and looking for any changes in that activity, trading opportunities can be spotted along with a deeper understanding of the reliability of other indicators on the stock.  A significant increase in trading volume means that more than double the average amount of stocks are moving.  When volume is decreased significantly, it may indicate there is an issue that shareholders should watch out for.  It’s also important to take into consideration how long the unusual volume sustains for.  If it’s only the one trading day, it can be dismissed as an anomaly.

The current stock levels place it -12.71% away from the 200 day moving average. China Automotive Systems, Inc. has a beta of 1.56 and the weekly and monthly volatility stands at 8.15% and 6.64% respectively. The simple moving average is the most common method used to calculate the moving average of prices.  It takes the sum of all of the past closing prices over a specific time period and divides the result by the number of prices used in the calculation.  Increasing the number of time periods in the calculation is an effective way to ascertain the strength of the long-term trend and/or the likelihood that it might reverse.  Some argue that this type of average is not necessarily useful because each data point in the series has the exact same impact on the result no matter where it occurs in the sequence.

Even though the stock market has been cranking along and touching record highs, there are bound to be some rough patches in the near future. Some investors may actually welcome a pullback in order to scoop up some stocks at a relative discount. Investors who are on top of things are most likely ready to spring when the next big buying opportunity pops up. Being prepared for a buying opportunity can make the process much easier when the time comes. As investors look ahead to the next round of company earnings reports, the focus may gravitate to those companies that have positioned themselves for sustained future growth. Many investors will be closely monitoring which companies outperform by the largest margin after earnings results are released.  

Beta is used to measure a stock’s price volatility relative to the market. A stock with a beta of “0” indicates that its price is not correlated with the market. A positive beta indicates that the stock follows the market. A negative beta means that the stock inversely follows the market, decreasing in value when the market goes up. 

Disclaimer: The views of the author are in no way suggesting whether or not to buy a stock.  Data is provided by Yahoo Finance.

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