Parsley Energy (PE) Stock Shows Much Promise
NEW YORK (TheStreet) -- Parsley Energy (PE) - Get Report has put in a nice base pattern and is poised to move higher.
This chart of PE, above, shows a bullish set up with PE over the rising 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line is steady and the Moving Average Convergence Divergence (MACD) oscillator is positive. Traders could go long with PE here on strength. A sell-stop below $18 should work to control risk and we have price targets for PE in the $25 to $26 area.
TheStreet Ratings team rates PARSLEY ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate PARSLEY ENERGY INC (PE) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, unimpressive growth in net income and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PARSLEY ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. For the next year, the market is expecting a contraction of 194.3% in earnings (-$0.20 versus $0.21).
- The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 94.6% when compared to the same quarter one year ago, falling from $16.87 million to $0.91 million.
- After a year of stock price fluctuations, the net result is that PE's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- Despite currently having a low debt-to-equity ratio of 0.40, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- Despite the weak revenue results, PE has outperformed against the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 23.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: PE
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.