BRF (BRFS) Highlighted As Strong And Under The Radar Stock Of The Day

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 BRF ( BRFS) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified BRF as such a stock due to the following factors:

  • BRFS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.4 million.
  • BRFS is making at least a new 3-day high.
  • BRFS has a PE ratio of 54.4.
  • BRFS is mentioned 0.68 times per day on StockTwits.
  • BRFS has not yet been mentioned on StockTwits today.
  • BRFS is currently in the upper 20% of its 1-year range.
  • BRFS is in the upper 35% of its 20-day range.
  • BRFS is in the upper 45% of its 5-day range.
  • BRFS is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on BRFS:

BRF S.A., together with its subsidiaries, is engaged in raising, producing, and slaughtering poultry, pork, and beef in Brazil. It operates in four segments: Domestic Market, Foreign Market, Dairy Products, and Food Service. BRFS has a PE ratio of 54.4. Currently there are 2 analysts that rate BRF a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for BRF has been 1.1 million shares per day over the past 30 days. BRF has a market cap of $23.2 billion and is part of the consumer goods sector and food & beverage industry. Shares are up 27.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates BRF as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 15.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.08, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for BRF SA is currently lower than what is desirable, coming in at 30.22%. Regardless of BRFS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.48% 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. In comparison to the other companies in the Food Products industry and the overall market, BRF SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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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