Perilous Reversal Stock: Basic Energy Services (BAS)
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 Basic Energy Services as such a stock due to the following factors:
- BAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.3 million.
- BAS has traded 68,650 shares today.
- BAS is down 3.1% today.
- BAS was up 5.5% yesterday.
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More details on BAS:
Basic Energy Services, Inc. provides well site services to oil and natural gas drilling and producing companies in the United States. Currently there are 7 analysts that rate Basic Energy Services a buy, 1 analyst rates it a sell, and 6 rate it a hold.
The average volume for Basic Energy Services has been 3.7 million shares per day over the past 30 days. Basic Energy Services has a market cap of $300.1 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.91 and a short float of 14.4% with 1.57 days to cover. Shares are up 0.6% year-to-date as of the close of trading on Thursday.
Analysis:
rates Basic Energy Services as a
. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the ratings report include:
- 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 Energy Equipment & Services industry. The net income has significantly decreased by 154.2% when compared to the same quarter one year ago, falling from -$7.40 million to -$18.81 million.
- The debt-to-equity ratio is very high at 2.58 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- The gross profit margin for BASIC ENERGY SERVICES INC is rather low; currently it is at 17.27%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -4.69% trails that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 69.53%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 150.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- BASIC ENERGY SERVICES 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BASIC ENERGY SERVICES INC continued to lose money by earning -$0.20 versus -$0.89 in the prior year. For the next year, the market is expecting a contraction of 1316.5% in earnings (-$2.83 versus -$0.20).
- You can view the full Basic Energy Services Ratings Report.
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