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Callon Petroleum (CPE) Is Today's Strong On High Volume 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 Callon Petroleum ( CPE) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Callon Petroleum as such a stock due to the following factors:

  • CPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.3 million.
  • CPE has traded 152,696 shares today.
  • CPE is trading at 3.99 times the normal volume for the stock at this time of day.
  • CPE is trading at a new high 3.18% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in CPE with the Ticky from Trade-Ideas. See the FREE profile for CPE NOW at Trade-Ideas

More details on CPE:

Callon Petroleum Company is engaged in the acquisition, exploration, development, and production of oil and gas properties properties in the Permian Basin in West Texas. CPE has a PE ratio of 138.4. Currently there are 7 analysts that rate Callon Petroleum a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Callon Petroleum has been 965,800 shares per day over the past 30 days. Callon has a market cap of $395.8 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.51 and a short float of 4.2% with 6.27 days to cover. Shares are up 49.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Callon Petroleum as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • CPE's very impressive revenue growth greatly exceeded the industry average of 2.4%. Since the same quarter one year prior, revenues leaped by 78.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for CALLON PETROLEUM CO/DE is currently very high, coming in at 83.64%. It has increased significantly from the same period last year. Along with this, the net profit margin of 11.70% is above that of the industry average.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • This stock has managed to rise its share value by 134.62% over the past twelve months. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CALLON PETROLEUM CO/DE's return on equity significantly trails that of both the industry average and the S&P 500.

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