NEW YORK, June 16 China-based Deer Consumer Products
DEER.O has lower earnings quality than almost 90 percent of its
global peers, according to StarMine data.
Deer is one of many U.S.-listed stocks from China that have
taken a hit recently on concerns about accounting standards.
Deer scores 11 out of a possible 100 based on StarMine's
earnings quality ranking, according to Reuters Insider
quantitative analyst Mike Tarsala and Tim Gaumer, analyst with
Thomson Reuters Investment and Advisory.
That analysis takes into account the level of accruals
relative to revenue and other metrics, cash flows backing
earnings, as well as operating efficiency.
Emerging markets stocks with earnings scores of 10 or below
underperformed those with scores above 90 by 15.5 percent on an
annualized basis, based on a 10-year back test, according to
Deer could not be reached for comment on the analysis.
Deer's cash-from-operations growth has lagged net income in
each of the past seven quarters, according to StarMine data,
reflecting that less of the company's earnings are coming from
Deer's inventory accruals rose faster than revenue in its
most recent quarter. On average, companies with rising accruals
tend to underperform other stocks, according to Thomson Reuters
To watch the analysis in full, click on
(Reporting by Mike Tarsala)