Baytex Energy (BTE) Is Today's Perilous Reversal 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
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Baytex Energy as such a stock due to the following factors:
- BTE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.9 million.
- BTE has traded 68,848 shares today.
- BTE is down 3% today.
- BTE was up 5.5% yesterday.
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More details on BTE:
Baytex Energy Corp., an oil and gas company, is engaged in the acquisition, development, and production of oil and natural gas in the Western Canadian Sedimentary Basin and the United States. The company offers heavy oil, light oil, and natural gas liquids. The stock currently has a dividend yield of 7%. BTE has a PE ratio of 8.5. Currently there are 3 analysts that rate Baytex Energy a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Baytex Energy has been 1.2 million shares per day over the past 30 days. Baytex Energy has a market cap of $2.3 billion and is part of the basic materials sector and energy industry. Shares are down 11.4% year-to-date as of the close of trading on Friday.
Analysis:
rates Baytex Energy as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 19.8%. Since the same quarter one year prior, revenues rose by 42.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that BTE's debt-to-equity ratio is low, the quick ratio, which is currently 0.50, displays a potential problem in covering short-term cash needs.
- BTE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 63.82%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, BTE is still more expensive than most of the other companies in its industry.
- 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, BAYTEX ENERGY 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 Baytex Energy Ratings Report.
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