NEW YORK (TheStreet) -- Shares of Ambev S.A. (ABEV) - Get Report rose 3.96% to $6.82 in early afternoon trading Monday after Brazil's presidential election on Sunday resulted in a runoff to be held on October 26.
Incumbent Dilma Rousseff received 41.59% of the votes, while challenger Aecio Neves received 33.54%. Marina Silva, who had been gaining ground in the polls and moved into second place, finished third in Sunday's election with 21.31% of the votes.
The leading candidate required more than 50% of valid votes or more than all other candidates combined to win the election in the first round on Sunday and prevent the second round on October 26.
Brazilian stocks have typically fallen in recent weeks when polls showed Rousseff in the lead, but the stocks have risen when her opponents have chipped into her lead.
More than 20.1 million shares had changed hands as of 12:10 p.m., compared to the average volume of 14,857,000.
Separately, 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 few notable 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, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues rose by 22.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- AMBEV SA has improved earnings per share by 25.0% 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 year. We feel that this trend should continue. During the past fiscal year, AMBEV SA increased its bottom line by earning $0.26 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.33 versus $0.26).
- 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 119.9% when compared to the same quarter one year prior, rising from $459.49 million to $1,010.36 million.
- 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.
- Net operating cash flow has significantly increased by 62.95% to $1,202.03 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 -3.53%.
- You can view the full analysis from the report here: ABEV Ratings Report