Credicorp (BAP) Shows Signs Of Being Water-Logged And Getting Wetter

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 Credicorp ( BAP) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Credicorp as such a stock due to the following factors:

  • BAP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.1 million.
  • BAP has traded 357,185 shares today.
  • BAP traded in a range 208.4% of the normal price range with a price range of $5.19.
  • BAP traded below its daily resistance level (quality: 31 days, meaning that the stock is crossing a resistance level set by the last 31 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on BAP:

Credicorp Ltd., through its subsidiaries, provides financial services primarily in Peru, the Cayman Islands, Bolivia, Chile, Colombia, and Panama. It operates in four segments: Banking, Insurance, Pension Funds, and Investment Banking. The stock currently has a dividend yield of 1.9%. BAP has a PE ratio of 13.7. Currently there are 4 analysts that rate Credicorp a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Credicorp has been 321,700 shares per day over the past 30 days. The stock has a beta of 0.66 and a short float of 2.2% with 4.00 days to cover. Shares are down 7.8% year to date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Credicorp as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • BAP's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for CREDICORP LTD is rather high; currently it is at 63.92%. Regardless of BAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.41% trails the industry average.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market, CREDICORP LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • CREDICORP LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CREDICORP LTD increased its bottom line by earning $9.90 versus $8.89 in the prior year. For the next year, the market is expecting a contraction of 16.7% in earnings ($8.25 versus $9.90).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 68.3% when compared to the same quarter one year ago, falling from $171.95 million to $54.49 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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