Trade-Ideas: Petroleo Brasileiro SA Petrobras (PBR) Is Today's "Storm The Castle" Stock
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 Petroleo Brasileiro SA Petrobras (PBR) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Petroleo Brasileiro SA Petrobras as such a stock due to the following factors:
- PBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $262.6 million.
- PBR has traded 4.2 million shares today.
- PBR is trading at 2.39 times the normal volume for the stock at this time of day.
- PBR crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.EXCLUSIVE OFFER: Get the inside scoop on opportunities in PBR with the Ticky from Trade-Ideas. See the FREE profile for PBR NOW at Trade-IdeasMore details on PBR: Petroleo Brasileiro S.A. - Petrobras operates as an integrated oil and gas company in Brazil and internationally. The stock currently has a dividend yield of 0.7%. PBR has a PE ratio of 9.3. Currently there are 3 analysts that rate Petroleo Brasileiro SA Petrobras a buy, no analysts rate it a sell, and 6 rate it a hold.The average volume for Petroleo Brasileiro SA Petrobras has been 15.9 million shares per day over the past 30 days. Petroleo Brasileiro SA Petrobras has a market cap of $102.9 billion and is part of the basic materials sector and energy industry. Shares are down 18.9% year to date as of the close of trading on Wednesday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Petroleo Brasileiro SA Petrobras as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.Highlights from the ratings report include:
- PBR, with its decline in revenue, slightly underperformed the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 6.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has decreased to $6,274.00 million or 22.24% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 45.9% when compared to the same quarter one year ago, falling from $2,744.00 million to $1,484.00 million.
- You can view the full Petroleo Brasileiro SA Petrobras Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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