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Storm The Castle Stock Of The Day: Oasis Petroleum (OAS)

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 Oasis Petroleum ( OAS) 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 Oasis Petroleum as such a stock due to the following factors:

  • OAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $72.2 million.
  • OAS has traded 1.8 million shares today.
  • OAS is trading at 2.02 times the normal volume for the stock at this time of day.
  • OAS 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 OAS with the Ticky from Trade-Ideas. See the FREE profile for OAS NOW at Trade-Ideas

More details on OAS:

Oasis Petroleum Inc., an independent exploration and production company, focuses on the acquisition and development of oil and natural gas resources in the North Dakota and Montana regions of the Williston Basin. OAS has a PE ratio of 17.1. Currently there are 16 analysts that rate Oasis Petroleum a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Oasis Petroleum has been 2.1 million shares per day over the past 30 days. Oasis has a market cap of $4.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.00 and a short float of 9.1% with 5.42 days to cover. Shares are down 7.4% 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 Oasis Petroleum as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • OAS's very impressive revenue growth greatly exceeded the industry average of 7.7%. Since the same quarter one year prior, revenues leaped by 55.6%. Growth in the company's revenue appears to have helped boost 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • OASIS PETROLEUM INC has improved earnings per share by 23.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, OASIS PETROLEUM INC increased its bottom line by earning $2.44 versus $1.66 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $2.44).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 27.9% when compared to the same quarter one year prior, rising from $42.59 million to $54.49 million.
  • Net operating cash flow has increased to $161.18 million or 46.17% when compared to the same quarter last year. In addition, OASIS PETROLEUM INC has also vastly surpassed the industry average cash flow growth rate of -23.28%.

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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