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 Petroleo Brasileiro SA Petrobras ( PBR.A) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Petroleo Brasileiro SA Petrobras as such a stock due to the following factors:
- PBR.A has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $155.3 million.
- PBR.A has traded 4.7 million shares today.
- PBR.A is trading at 26.58 times the normal volume for the stock at this time of day.
- PBR.A crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in PBR.A with the Ticky from Trade-Ideas. See the FREE profile for PBR.A NOW at Trade-Ideas More details on PBR.A: 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 0.6%. PBR.A has a PE ratio of 7.1. The average volume for Petroleo Brasileiro SA Petrobras has been 8.5 million shares per day over the past 30 days. Petroleo Brasileiro SA Petrobras has a market cap of $112.0 billion and is part of the basic materials sector and energy industry. Shares are down 11.1% year to date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Petroleo Brasileiro SA Petrobras as a hold. 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.A'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.A'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.A'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.A'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.A's net profit margin of 8.42% compares favorably to the industry average.
- PBR.A has underperformed the S&P 500 Index, declining 23.51% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full Petroleo Brasileiro SA Petrobras Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.