Trade-Ideas LLC identified

Companhia Brasileira De Distribuicao

(

CBD

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Companhia Brasileira De Distribuicao as such a stock due to the following factors:

  • CBD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.5 million.
  • CBD has traded 478,888 shares today.
  • CBD is up 3.1% today.
  • CBD was down 10.7% yesterday.

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More details on CBD:

Companhia Brasileira de Distribuicao engages in the retail of food, clothing, home appliances, electronics, and other products through its chain of hypermarkets, supermarkets, specialized stores, and department stores primarily in Brazil. The stock currently has a dividend yield of 0.1%. CBD has a PE ratio of 9. Currently there are no analysts that rate Companhia Brasileira De Distribuicao a buy, 2 analysts rate it a sell, and none rate it a hold.

The average volume for Companhia Brasileira De Distribuicao has been 736,700 shares per day over the past 30 days. Companhia Brasileira De Distribuicao has a market cap of $4.4 billion and is part of the services sector and retail industry. Shares are up 39.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Companhia Brasileira De Distribuicao as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • 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 Food & Staples Retailing industry. The net income has significantly decreased by 127.6% when compared to the same quarter one year ago, falling from $60.30 million to -$16.62 million.
  • The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, CBD has a quick ratio of 0.50, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Food & Staples Retailing industry and the overall market, CIA BRASILEIRA DE DISTRIB's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CIA BRASILEIRA DE DISTRIB is rather low; currently it is at 21.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.33% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$2,246.48 million or 54.20% 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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