Oi (OIBR): Heavy Pre-Market Activity

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 Oi ( OIBR) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Oi as such a stock due to the following factors:

  • OIBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.8 million.
  • OIBR traded 3.8 million shares today in the pre-market hours as of 9:15 AM, representing 11.2% of its average daily volume.

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More details on OIBR:

Oi S.A., through its subsidiaries, provides integrated telecommunication services for residential customers, companies, and governmental agencies in Brazil. It operates in three segments: Fixed-Line and Data Transmission Services, Mobile Services, and Other Services. The stock currently has a dividend yield of 50.8%. Currently there is 1 analyst that rates Oi a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Oi has been 19.3 million shares per day over the past 30 days. Oi has a market cap of $1.1 billion and is part of the technology sector and telecommunications industry. Shares are down 57.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Oi as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • OI SA's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, OI SA reported lower earnings of $0.39 versus $0.79 in the prior year. For the next year, the market is expecting a contraction of 97.7% in earnings ($0.01 versus $0.39).
  • 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 Diversified Telecommunication Services industry. The net income has decreased by 22.3% when compared to the same quarter one year ago, dropping from $129.79 million to $100.88 million.
  • Although OIBR's debt-to-equity ratio of 2.97 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, OIBR maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
  • 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. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, OI SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to -$78.22 million or 109.84% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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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