Chinese social media company Weibo (Nasdaq: WB) is set to announce earnings on Wednesday, November 7 and the stock has been defying the odds in a certain manner. The stock has been trending lower since February within a clearly defined trend channel, but the company has some incredible fundamentals.
The daily chart shows the trend channel and how the stock has moved methodically lower over the last nine months. The upper rail of the channel is in sync with the 50-day moving average and has helped keep the trend going.
What is really odd about Weibo, in my view, is that the company’s fundamental ratings are really good. Looking at Investor’s Business Daily’s EPS and SMR ratings, the company gets a 99 on the EPS rating and an A on the SMR rating. Those are both the best ratings you can get.
The EPS rating measures a company’s earnings growth over the last three years as well as in the last few quarters. It compares them to all other companies in the IBD database and assigns a rating between 1 and 99 with 99 being the best.
The SMR rating measures a company’s sales growth, profit margin, and return on equity. The ratings range from A to E with A being the best.
Turning to one more rating from IBD, the company’s Relative Strength rating is currently at 6. The rating measures how the stock price has done compared to all other stocks in the database and assigns a rating between 1 and 99. A rating of a 6 means that 94% of stocks in the database have performed better than Weibo.