Concho Resources (CXO) On Momo Momentum Watch Today

Trade-Ideas LLC identified Concho Resources (CXO) as a momo momentum candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Concho Resources

(

CXO

) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Concho Resources as such a stock due to the following factors:

  • CXO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $159.3 million.
  • CXO has a PE ratio of 39.
  • CXO is currently in the upper 30% of its 1-year range.
  • CXO is in the upper 25% of its 20-day range.
  • CXO is in the upper 35% of its 5-day range.
  • CXO is currently trading above yesterday's high.
  • CXO has experienced a gap between today's open and yesterday's close of 2.1%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on CXO:

Concho Resources Inc., an independent oil and natural gas company, acquires, develops, and explores for oil and natural gas properties in the Unites States. The company's principal operating areas are located in the Permian Basin of southeast New Mexico and West Texas. CXO has a PE ratio of 39. Currently there are 14 analysts that rate Concho Resources a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Concho Resources has been 1.7 million shares per day over the past 30 days. Concho has a market cap of $13.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.75 and a short float of 4.2% with 3.30 days to cover. Shares are up 15.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Concho Resources as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.46 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 33.1%. Since the same quarter one year prior, revenues fell by 23.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for CONCHO RESOURCES INC is currently very high, coming in at 73.53%. Regardless of CXO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CXO's net profit margin of -22.41% significantly underperformed when compared to the industry average.
  • Net operating cash flow has declined marginally to $362.69 million or 4.24% when compared to the same quarter last year. Despite a decrease in cash flow CONCHO RESOURCES INC is still fairing well by exceeding its industry average cash flow growth rate of -19.63%.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1123.7% when compared to the same quarter one year ago, falling from $11.77 million to -$120.48 million.

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