Trade-Ideas: Braskem (BAK) Is Today's Strong On High Relative Volume Stock

Trade-Ideas LLC identified Braskem (BAK) as a strong on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Braskem

(

BAK

) 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 $9.9 million.
  • BAK has traded 188,187 shares today.
  • BAK is trading at 3.64 times the normal volume for the stock at this time of day.
  • BAK is trading at a new high 4.05% 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 3%. Currently there are no analysts that rate Braskem a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Braskem has been 673,700 shares per day over the past 30 days. Braskem has a market cap of $4.9 billion and is part of the basic materials sector and chemicals industry. Shares are down 6.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Braskem as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 466.1% when compared to the same quarter one year prior, rising from $62.58 million to $354.27 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Chemicals industry and the overall market on the basis of return on equity, BRASKEM SA has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • The debt-to-equity ratio is very high at 6.75 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, BAK has a quick ratio of 0.65, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has decreased to $183.82 million or 35.24% 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.

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