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 or Stephanie Link.Trade-Ideas LLC identified Apache Corporation (APA) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Apache Corporation as such a stock due to the following factors:
- APA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $267.7 million.
- APA has traded 2.3 million shares today.
- APA is trading at 4.12 times the normal volume for the stock at this time of day.
- APA crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.EXCLUSIVE OFFER: Get the inside scoop on opportunities in APA with the Ticky from Trade-Ideas. See the FREE profile for APA NOW at Trade-IdeasMore details on APA: Apache Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. The stock currently has a dividend yield of 1%. APA has a PE ratio of 12.4. Currently there are 12 analysts that rate Apache Corporation a buy, no analysts rate it a sell, and 11 rate it a hold.The average volume for Apache Corporation has been 3.5 million shares per day over the past 30 days. Apache has a market cap of $30.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.81 and a short float of 3.2% with 1.97 days to cover. Shares are up 1.7% year to date as of the close of trading on Friday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Apache Corporation as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 4.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that APA's debt-to-equity ratio is low, the quick ratio, which is currently 0.60, displays a potential problem in covering short-term cash needs.
- Net operating cash flow has declined marginally to $2,759.00 million or 1.18% when compared to the same quarter last year. Despite a decrease in cash flow APACHE CORP is still fairing well by exceeding its industry average cash flow growth rate of -17.92%.
- 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, APACHE CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full Apache Corporation Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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