Encana (ECA) Moving On Heavy Volume In The Pre-Market Hours
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 pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Encana as such a stock due to the following factors:
- ECA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.2 million.
- ECA traded 2.0 million shares today in the pre-market hours as of 8:23 AM, representing 26.8% of its average daily volume.
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More details on ECA:
Encana Corporation, together with its subsidiaries, is engaged in exploration for, development, production, and marketing of natural gas, oil, and natural gas liquids in Canada and the United States. The stock currently has a dividend yield of 2.2%. ECA has a PE ratio of 3.2. Currently there are 7 analysts that rate Encana a buy, 1 analyst rates it a sell, and 13 rate it a hold.
The average volume for Encana has been 9.1 million shares per day over the past 30 days. Encana has a market cap of $9.4 billion and is part of the basic materials sector and energy industry. Shares are down 9.5% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Encana as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- ECA's very impressive revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues leaped by 64.2%. 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 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- ENCANA CORP reported significant earnings per share improvement 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ENCANA CORP turned its bottom line around by earning $0.31 versus -$3.79 in the prior year. For the next year, the market is expecting a contraction of 133.9% in earnings (-$0.11 versus $0.31).
- ECA'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 31.49%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- Net operating cash flow has decreased to $696.00 million or 25.56% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full Encana Ratings Report.
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