Today's Dead Cat Bounce Stock Is Bonanza Creek Energy (BCEI)
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 "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Bonanza Creek Energy as such a stock due to the following factors:
- BCEI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.0 million.
- BCEI has traded 312,389 shares today.
- BCEI is up 3.1% today.
- BCEI was down 5.6% yesterday.
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More details on BCEI:
Bonanza Creek Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of onshore oil and associated liquids natural gas in the United States. BCEI has a PE ratio of 66.0. Currently there are 10 analysts that rate Bonanza Creek Energy a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Bonanza Creek Energy has been 1.8 million shares per day over the past 30 days. Bonanza Creek Energy has a market cap of $1.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.83 and a short float of 18.3% with 4.79 days to cover. Shares are up 6.4% year-to-date as of the close of trading on Friday.
Analysis:
rates Bonanza Creek Energy as a
. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and disappointing return on equity.
Highlights from the ratings report include:
- Despite the weak revenue results, BCEI has outperformed against the industry average of 19.8%. Since the same quarter one year prior, revenues slightly dropped by 7.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.30%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 266.66% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, BCEI is still more expensive than most of the other companies in its industry.
- BONANZA CREEK 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. 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, BONANZA CREEK ENERGY INC reported lower earnings of $0.40 versus $1.72 in the prior year. For the next year, the market is expecting a contraction of 211.3% in earnings (-$0.45 versus $0.40).
- You can view the full Bonanza Creek Energy Ratings Report.
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