Watch Out: Barbarians At The Gate For Brookfield Asset Management (BAM)

Trade-Ideas LLC identified Brookfield Asset Management ( BAM) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Brookfield Asset Management as such a stock due to the following factors:

  • BAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.8 million.
  • BAM has traded 1.3 million shares today.
  • BAM traded in a range 202% of the normal price range with a price range of $1.41.
  • BAM traded above its daily resistance level (quality: 45 days, meaning that the stock is crossing a resistance level set by the last 45 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on BAM:

Brookfield Asset Management Inc. is a publicly owned asset management holding company. Through its subsidiaries the firm invests in the property, power, and infrastructure sectors. The stock currently has a dividend yield of 1.5%. BAM has a PE ratio of 15. Currently there are 3 analysts that rate Brookfield Asset Management a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Brookfield Asset Management has been 1.2 million shares per day over the past 30 days. Brookfield Asset Management has a market cap of $33.4 billion and is part of the financial sector and real estate industry. Shares are up 5.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Brookfield Asset Management as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 26.4%. Since the same quarter one year prior, revenues rose by 18.0%. 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.
  • Net operating cash flow has decreased to $687.00 million or 30.95% when compared to the same quarter last year. Despite a decrease in cash flow of 30.95%, BROOKFIELD ASSET MANAGEMENT is in line with the industry average cash flow growth rate of -33.62%.
  • The share price of BROOKFIELD ASSET MANAGEMENT has not done very well: it is down 6.95% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • The gross profit margin for BROOKFIELD ASSET MANAGEMENT is currently lower than what is desirable, coming in at 25.70%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 12.24% is above that of the industry average.

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