Telefonica Brasil (VIV) Weak On High Volume

Trade-Ideas LLC identified Telefonica Brasil (VIV) as a weak on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Telefonica Brasil

(

VIV

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Telefonica Brasil as such a stock due to the following factors:

  • VIV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.9 million.
  • VIV has traded 399,608 shares today.
  • VIV is trading at 2.22 times the normal volume for the stock at this time of day.
  • VIV is trading at a new low 4.04% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 VIV:

Telefonica Brasil S.A. The stock currently has a dividend yield of 11.1%. Currently there are 5 analysts that rate Telefonica Brasil a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Telefonica Brasil has been 2.9 million shares per day over the past 30 days. Telefonica Brasil has a market cap of $17.0 billion and is part of the technology sector and telecommunications industry. Shares are down 44.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Telefonica Brasil as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • The gross profit margin for TELEFONICA BRASIL SA is rather high; currently it is at 63.18%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.06% trails the industry average.
  • VIV's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, TELEFONICA BRASIL SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to $409.96 million or 54.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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