Trade-Ideas: Brookfield Asset Management (BAM) Is Today's "Water-Logged And Getting Wetter" Stock

Trade-Ideas LLC identified Brookfield Asset Management (BAM) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Brookfield Asset Management

(

BAM

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Brookfield Asset Management as such a stock due to the following factors:

  • BAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.2 million.
  • BAM has traded 770,629 shares today.
  • BAM traded in a range 207.3% of the normal price range with a price range of $1.37.
  • BAM traded below its daily resistance level (quality: 30 days, meaning that the stock is crossing a resistance level set by the last 30 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on BAM:

Brookfield Asset Management Inc. is a publicly owned asset management holding company. Through its subsidiaries the firm invests in the property, power, and infrastructure sectors. The stock currently has a dividend yield of 1.4%. BAM has a PE ratio of 11. Currently there are 3 analysts that rate Brookfield Asset Management a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Brookfield Asset Management has been 1.5 million shares per day over the past 30 days. Brookfield Asset Management has a market cap of $33.4 billion and is part of the financial sector and real estate industry. Shares are up 3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Brookfield Asset Management as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • BAM's revenue growth trails the industry average of 13.4%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • BROOKFIELD ASSET MANAGEMENT's earnings per share declined by 21.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BROOKFIELD ASSET MANAGEMENT increased its bottom line by earning $3.11 versus $2.09 in the prior year. For the next year, the market is expecting a contraction of 45.4% in earnings ($1.70 versus $3.11).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Real Estate Management & Development industry average. The net income has decreased by 17.8% when compared to the same quarter one year ago, dropping from $785.00 million to $645.00 million.

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