Trade-Ideas: EP Energy (EPE) Is Today's "Dead Cat Bounce" Stock
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 EP Energy as such a stock due to the following factors:
- EPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.7 million.
- EPE has traded 757,536 shares today.
- EPE is up 3.1% today.
- EPE was down 6.9% yesterday.
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More details on EPE:
EP Energy Corporation, an independent exploration and production company, is engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States. EPE has a PE ratio of 13.1. Currently there are 6 analysts that rate EP Energy a buy, 1 analyst rates it a sell, and 7 rate it a hold.
The average volume for EP Energy has been 2.2 million shares per day over the past 30 days. EP Energy has a market cap of $2.8 billion and is part of the basic materials sector and energy industry. Shares are up 0.3% year-to-date as of the close of trading on Monday.
Analysis:
rates EP Energy as a
. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.
Highlights from the ratings report include:
- The debt-to-equity ratio of 1.18 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.44, which clearly demonstrates the inability to cover short-term cash needs.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 1.6% when compared to the same quarter one year ago, dropping from $310.00 million to $305.00 million.
- EPE'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 28.10%, 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.
- Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EP ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full EP Energy Ratings Report.
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