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
) as a weak 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 $10.5 million.
- BAK has traded 55,533 shares today.
- BAK is trading at 2.18 times the normal volume for the stock at this time of day.
- BAK is trading at a new low 3.04% 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 BAK:
Braskem S.A., together with its subsidiaries, produces and sells thermoplastic resins. The stock currently has a dividend yield of 3.4%. Currently there is 1 analyst that rates Braskem a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Braskem has been 456,500 shares per day over the past 30 days. Braskem has a market cap of $5.9 billion and is part of the basic materials sector and chemicals industry. Shares are down 13.5% year-to-date as of the close of trading on Friday.
rates Braskem as a
. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and poor profit margins.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 360.95% to $389.24 million when compared to the same quarter last year. In addition, BRASKEM SA has also vastly surpassed the industry average cash flow growth rate of 11.80%.
- The revenue fell significantly faster than the industry average of 9.8%. Since the same quarter one year prior, revenues fell by 23.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Chemicals industry. The net income has significantly decreased by 52.3% when compared to the same quarter one year ago, falling from $179.33 million to $85.58 million.
- The debt-to-equity ratio is very high at 3.58 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 0.76, which illustrates the inability to avoid short-term cash problems.
- You can view the full Braskem Ratings Report.