Braskem S.A. (BAK) Expected to Picking Up

Company Profile:

Braskem S.A. (Braskem) is a producer of thermoplastic resins. The Company has 36 industrial plants, of which 29 are in Brazil, five in the United States and two in Europe. These units produce thermoplastic resins: polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC), as well as basic petrochemicals. Braskem’s business operations consist of four production segments and one distribution segment: Basic Petrochemicals Unit, Polyolefins, Vinyls, United States and Europe, and Chemical distribution. The company was formerly known as Copene Petroquímica do Nordeste S.A. and changed its name to Braskem S.A. in 2002. The company was founded in 1972 and is headquartered in Camacari, Brazil. Braskem S.A. is a subsidiary of Odebrecht S.A.

Recent News:

Brazilian oil producer, Petroleo Brasileiro Petrobras SA may look to divest its stake in Braskem SA, a petrochemicals company, as it looks to record provisions for tax debts that have reached levels beyond $12.7 billion.

The Rosen Law Firm, a global investor rights firm, announces that a class action lawsuit has been filed on behalf of purchasers of Braskem S.A. (BAK) securities from June 1, 2010 through March 11, 2015, all dates inclusive. The lawsuit seeks to recover damages for Braskem investors under the federal securities laws.

In 1Q15, Braskem recorded net income of R$204 million.S &P maintained Braskem’s rating to “BBB-” with a “Stable” outlook.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

@@@@@

Profitability – Measures the historical price movement of the stock.

@@@@@

Solvency – Measures the solvency of the company based on several ratios.

@@@@@

Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

@@@@@

Conclusion:

BAK’s strengths can be seen in its better profitability and better efficiency. Its revenue has increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator. RSI is increasing to 48.82. The current P/E ratio indicates it is undervalued compared to the average P/E ratio of the industry and the sector. We rate Braskem S.A. (BAK) a Strong BUY.