Macro Bank (BMA): Today's Weak On High Volume Stock

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 Macro Bank ( BMA) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Macro Bank as such a stock due to the following factors:

  • BMA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.7 million.
  • BMA has traded 53,022 shares today.
  • BMA is trading at 6.11 times the normal volume for the stock at this time of day.
  • BMA is trading at a new low 5.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 BMA:

Banco Macro S.A. provides various banking products and services to individuals, entrepreneurs, and corporate customers in Argentina. The stock currently has a dividend yield of 2.3%. BMA has a PE ratio of 2. Currently there are 2 analysts that rate Macro Bank a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Macro Bank has been 126,000 shares per day over the past 30 days. Macro has a market cap of $2.9 billion and is part of the financial sector and banking industry. Shares are up 12.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Macro Bank as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • BMA's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 6.5%. 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.
  • Compared to its closing price of one year ago, BMA's share price has jumped by 47.38%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BMA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has slightly increased to -$276.96 million or 4.81% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -37.29%.
  • BANCO MACRO SA's earnings per share declined by 15.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BANCO MACRO SA increased its bottom line by earning $6.97 versus $6.44 in the prior year. This year, the market expects an improvement in earnings ($7.48 versus $6.97).
  • The gross profit margin for BANCO MACRO SA is rather high; currently it is at 63.21%. Regardless of BMA'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 19.99% trails the industry average.

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