Trade-Ideas: Devon Energy (DVN) Is Today's Strong On High Relative Volume Stock
Trade-Ideas LLC identified
(
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Devon Energy as such a stock due to the following factors:
- DVN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $300.4 million.
- DVN has traded 937,607 shares today.
- DVN is trading at 2.48 times the normal volume for the stock at this time of day.
- DVN is trading at a new high 5.02% above yesterday's close.
'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on DVN:
Devon Energy Corporation, an independent energy company, primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs) in the United States and Canada. It operates approximately 19,000 wells. The stock currently has a dividend yield of 0.6%. Currently there are 19 analysts that rate Devon Energy a buy, 1 analyst rates it a sell, and 2 rate it a hold.
The average volume for Devon Energy has been 9.8 million shares per day over the past 30 days. Devon Energy has a market cap of $19.7 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.13 and a short float of 2.9% with 2.01 days to cover. Shares are up 17.7% year-to-date as of the close of trading on Monday.
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Analysis:
rates Devon Energy as a
. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.
Highlights from the ratings report include:
- 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, DEVON ENERGY CORP'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 $149.00 million or 90.95% 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.
- DVN'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 35.79%, 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. 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.
- Currently the debt-to-equity ratio of 1.96 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, DVN's quick ratio is somewhat strong at 1.03, demonstrating the ability to handle short-term liquidity needs.
- DVN, with its decline in revenue, underperformed when compared the industry average of 24.0%. Since the same quarter one year prior, revenues fell by 34.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Devon Energy Ratings Report.
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