Strong On High Volume: Banco Santander Brasil SA/Brazil (BSBR)

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.

Trade-Ideas LLC identified Banco Santander Brasil SA/Brazil ( BSBR) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Banco Santander Brasil SA/Brazil as such a stock due to the following factors:

  • BSBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.1 million.
  • BSBR has traded 182,817 shares today.
  • BSBR is trading at 2.12 times the normal volume for the stock at this time of day.
  • BSBR is trading at a new high 3.19% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. 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. 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.

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More details on BSBR:

Banco Santander (Brasil) S.A. provides banking products and services in Brazil and internationally. It offers commercial banking, investment, mortgage, leasing, credit card, and foreign exchange services, as well as various lending and financing services. The stock currently has a dividend yield of 2.7%. Currently there are no analysts that rate Banco Santander Brasil SA/Brazil a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Banco Santander Brasil SA/Brazil has been 1.2 million shares per day over the past 30 days. Banco Santander Brasil SA/Brazil has a market cap of $37.8 billion and is part of the financial sector and banking industry. Shares are down 0.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Banco Santander Brasil SA/Brazil as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 76.44% to -$1,493.96 million when compared to the same quarter last year. In addition, BANCO SANTANDER BRASIL -ADR has also vastly surpassed the industry average cash flow growth rate of -37.15%.
  • The revenue fell significantly faster than the industry average of 0.1%. Since the same quarter one year prior, revenues fell by 42.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for BANCO SANTANDER BRASIL -ADR is rather low; currently it is at 20.43%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 14.55% significantly trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Banks industry average. The net income has decreased by 18.0% when compared to the same quarter one year ago, dropping from $617.86 million to $506.51 million.

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