Companhia Brasileira De Distribuicao (CBD) Is Weak On High Volume Today

Trade-Ideas LLC identified Companhia Brasileira De Distribuicao ( CBD) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Companhia Brasileira De Distribuicao as such a stock due to the following factors:

  • CBD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.5 million.
  • CBD has traded 122,422 shares today.
  • CBD is trading at 4.12 times the normal volume for the stock at this time of day.
  • CBD is trading at a new low 4.00% 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 CBD:

Companhia Brasileira de Distribuicao engages in the retail of food, clothing, home appliances, electronics, and other products through its chain of hypermarkets, supermarkets, specialized stores, and department stores primarily in Brazil. The stock currently has a dividend yield of 0.9%. CBD has a PE ratio of 9. Currently there is 1 analyst that rates Companhia Brasileira De Distribuicao a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Companhia Brasileira De Distribuicao has been 691,400 shares per day over the past 30 days. Companhia Brasileira De Distribuicao has a market cap of $4.3 billion and is part of the services sector and retail industry. Shares are down 55.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Companhia Brasileira De Distribuicao as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $666.31 million or 39.92% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -9.62%.
  • CBD, with its decline in revenue, underperformed when compared the industry average of 4.1%. Since the same quarter one year prior, revenues fell by 24.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. When compared to other companies in the Food & Staples Retailing industry and the overall market, CIA BRASILEIRA DE DISTRIB's return on equity is below that of both the industry average and the S&P 500.
  • 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 Food & Staples Retailing industry. The net income has significantly decreased by 83.1% when compared to the same quarter one year ago, falling from $122.54 million to $20.72 million.

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