NEW YORK (TheStreet) -- Bazaarvoice (BV) stock is gaining Monday after the company disclosed an insider buy from president Eugene Austin. In an SEC filing, Austin declared his purchase of 10,000 shares at an average price of $7.05 a share.
Following this transaction, Austin owns 260,000 shares of common stock.
By late afternoon, shares had jumped 5.5% to $7.59. Trading volume of 1.1 million shares was double its three-month daily average.
TheStreet Ratings team rates BAZAARVOICE INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BAZAARVOICE INC (BV) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Internet Software & Services industry. The net income has decreased by 2.3% when compared to the same quarter one year ago, dropping from -$23.14 million to -$23.68 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet Software & Services industry and the overall market, BAZAARVOICE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- BV has underperformed the S&P 500 Index, declining 11.85% 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.
- The gross profit margin for BAZAARVOICE INC is currently very high, coming in at 74.68%. Regardless of BV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BV's net profit margin of -54.97% significantly underperformed when compared to the industry average.
- Although BV's debt-to-equity ratio of 0.13 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.97 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: BV Ratings Report