Trade-Ideas LLC identified

Fibria Celulose

(

FBR

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

  • FBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.1 million.
  • FBR has traded 845,869 shares today.
  • FBR is trading at 3.42 times the normal volume for the stock at this time of day.
  • FBR is trading at a new low 4.03% 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 FBR:

Fibria Celulose S.A. engages in the production, sale, and export of short fiber pulp. The company primarily offers bleached eucalyptus kraft pulp used in the manufacture of tissue, coated and uncoated printing and writing paper, and coated packaging boards. The stock currently has a dividend yield of 11.1%. FBR has a PE ratio of 15. Currently there is 1 analyst that rates Fibria Celulose a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Fibria Celulose has been 1.4 million shares per day over the past 30 days. Fibria Celulose has a market cap of $5.0 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are down 29.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Fibria Celulose as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 27.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FIBRIA CELULOSE SA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FIBRIA CELULOSE SA increased its bottom line by earning $0.14 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($4.70 versus $0.14).
  • FBR's debt-to-equity ratio of 1.00 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.25 is sturdy.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Paper & Forest Products industry average, but is greater than that of the S&P 500. The net income increased by 495.4% when compared to the same quarter one year prior, rising from -$57.87 million to $228.84 million.
  • FBR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.58%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, FBR is still more expensive than most of the other companies in its industry.

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