Strong On High Relative Volume: BRF (BRFS)

Trade-Ideas LLC identified BRF ( BRFS) as a strong on high relative volume 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 $20.9 million.
  • BRFS has traded 215,556 shares today.
  • BRFS is trading at 3.15 times the normal volume for the stock at this time of day.
  • BRFS is trading at a new high 3.02% 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 BRFS:

BRF S.A., together with its subsidiaries, focuses on raising, producing, and slaughtering poultry and pork in Brazil. It also engages in processing and selling fresh meat, processed foods, pasta, sauce, mayonnaise, frozen vegetables and soybean by-products. The stock currently has a dividend yield of 2%. BRFS has a PE ratio of 28. Currently there are no analysts that rate BRF a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for BRF has been 1.8 million shares per day over the past 30 days. BRF has a market cap of $11.2 billion and is part of the consumer goods sector and food & beverage industry. Shares are up 0.8% year-to-date as of the close of trading on Thursday.

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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, reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • BRFS's revenue growth trails the industry average of 16.6%. Since the same quarter one year prior, revenues slightly increased by 3.4%. 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 significantly decreased to -$31.17 million or 106.70% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Products industry. The net income has significantly decreased by 92.5% when compared to the same quarter one year ago, falling from $145.91 million to $11.00 million.

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