Perilous Reversal Watch: Energy XXI (EXXI)
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.
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 Energy XXI as such a stock due to the following factors:
- EXXI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.4 million.
- EXXI has traded 101,315 shares today.
- EXXI is down 3.1% today.
- EXXI was up 6.6% yesterday.
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More details on EXXI:
Energy XXI (Bermuda) Limited is engaged in the acquisition, exploration, development, production, and operation of oil and natural gas properties onshore in Louisiana and Texas, and on the Gulf of Mexico. The stock currently has a dividend yield of 9.7%. Currently there are 2 analysts that rate Energy XXI a buy, no analysts rate it a sell, and 5 rate it a hold.
The average volume for Energy XXI has been 6.2 million shares per day over the past 30 days. Energy XXI has a market cap of $360.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.47 and a short float of 28.7% with 4.55 days to cover. Shares are up 20.6% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Energy XXI as a
. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- ENERGY XXI LTD 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ENERGY XXI LTD reported lower earnings of $0.61 versus $1.84 in the prior year. For the next year, the market is expecting a contraction of 536.1% in earnings (-$2.66 versus $0.61).
- 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 3662.4% when compared to the same quarter one year ago, falling from $10.50 million to -$373.88 million.
- The debt-to-equity ratio is very high at 2.64 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.49, which clearly demonstrates the inability to cover short-term cash needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENERGY XXI LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$42.64 million or 127.72% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full Energy XXI Ratings Report.
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