Trade-Ideas: Marathon Oil (MRO) Is Today's "Storm The Castle" Stock
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 Marathon Oil (MRO) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Marathon Oil as such a stock due to the following factors:
- MRO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $182.5 million.
- MRO has traded 6.8 million shares today.
- MRO is trading at 1.97 times the normal volume for the stock at this time of day.
- MRO crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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.EXCLUSIVE OFFER: Get the inside scoop on opportunities in MRO with the Ticky from Trade-Ideas. See the FREE profile for MRO NOW at Trade-IdeasMore details on MRO: Marathon Oil Corporation operates as an energy company worldwide. The stock currently has a dividend yield of 2.3%. MRO has a PE ratio of 15.0. Currently there are 12 analysts that rate Marathon Oil a buy, no analysts rate it a sell, and 4 rate it a hold.The average volume for Marathon Oil has been 4.8 million shares per day over the past 30 days. Marathon Oil has a market cap of $23.7 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.76 and a short float of 1.4% with 1.75 days to cover. Shares are up 8.7% year to date as of the close of trading on Monday.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 Marathon Oil as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.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 5.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for MARATHON OIL CORP is rather high; currently it is at 67.13%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.87% is above that of the industry average.
- Net operating cash flow has increased to $868.00 million or 12.87% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -17.92%.
- You can view the full Marathon Oil 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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