Braskem (BAK) Flagged As Strong On High Volume
Trade-Ideas LLC identified
(
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Braskem as such a stock due to the following factors:
- BAK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.2 million.
- BAK has traded 65,472 shares today.
- BAK is trading at 2.17 times the normal volume for the stock at this time of day.
- BAK is trading at a new high 4.14% above yesterday's close.
'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. 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. 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.
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More details on BAK:
Braskem S.A., together with its subsidiaries, produces and sells thermoplastic resins. The stock currently has a dividend yield of 5.7%. Currently there is 1 analyst that rates Braskem a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Braskem has been 512,400 shares per day over the past 30 days. Braskem has a market cap of $4.7 billion and is part of the basic materials sector and chemicals industry. Shares are down 12.5% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Braskem as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 7.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 176.08% and other important driving factors, this stock has surged by 43.43% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- BRASKEM SA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, BRASKEM SA increased its bottom line by earning $4.61 versus $1.89 in the prior year. For the next year, the market is expecting a contraction of 53.1% in earnings ($2.16 versus $4.61).
- Net operating cash flow has significantly decreased to $212.74 million or 69.70% 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 debt-to-equity ratio is very high at 8.86 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, BAK maintains a poor quick ratio of 0.77, which illustrates the inability to avoid short-term cash problems.
- You can view the full Braskem Ratings Report.
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