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 "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Petroleo Brasileiro SA Petrobras as such a stock due to the following factors:
- PBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $223.7 million.
- PBR has traded 10.3 million shares today.
- PBR traded in a range 233.7% of the normal price range with a price range of $0.82.
- PBR traded above its daily resistance level (quality: 27 days, meaning that the stock is crossing a resistance level set by the last 27 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on PBR:
Petroleo Brasileiro S.A. - Petrobras operates as an integrated oil and gas company in Brazil and internationally. The stock currently has a dividend yield of 0.7%. PBR has a PE ratio of 9.3. Currently there are 4 analysts that rate Petroleo Brasileiro SA Petrobras a buy, no analysts rate it a sell, and 5 rate it a hold.
The average volume for Petroleo Brasileiro SA Petrobras has been 18.9 million shares per day over the past 30 days. Petroleo Brasileiro SA Petrobras has a market cap of $103.6 billion and is part of the basic materials sector and energy industry. Shares are down 18.4% year to date as of the close of trading on Friday.
rates Petroleo Brasileiro SA Petrobras as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
Highlights from the ratings report include:
- PBR's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 2.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PBR's debt-to-equity ratio of 0.73 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. Despite the fact that PBR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.59 is high and demonstrates strong liquidity.
- The gross profit margin for PETROBRAS-PETROLEO BRASILIER is currently lower than what is desirable, coming in at 34.56%. Regardless of PBR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PBR's net profit margin of 8.42% compares favorably to the industry average.
- PBR'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 31.40%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full Petroleo Brasileiro SA Petrobras Ratings Report.