Shares of Ambev gained 0.4% to close at $7.03.
More than 28.8 million shares of the beverage company Wednesday, more than double the average daily trading volume of about 10.2 million shares.
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TheStreet Ratings team rates AMBEV SA as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMBEV SA (ABEV) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, notable return on equity, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ABEV's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 3.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Beverages industry and the overall market, AMBEV SA's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for AMBEV SA is rather high; currently it is at 66.74%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.15% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 93.12% to $699.73 million when compared to the same quarter last year. In addition, AMBEV SA has also vastly surpassed the industry average cash flow growth rate of -9.65%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 58.2% when compared to the same quarter one year prior, rising from $713.66 million to $1,129.23 million.
- You can view the full analysis from the report here: ABEV Ratings Report
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.