Trade-Ideas: Goodrich Petroleum (GDP) 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.
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 Goodrich Petroleum as such a stock due to the following factors:
- GDP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.1 million.
- GDP has traded 157,914 shares today.
- GDP is up 5.6% today.
- GDP was down 6.8% yesterday.
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More details on GDP:
Goodrich Petroleum Corporation, an independent oil and natural gas company, engages in the exploration, development, and production of oil and natural gas. Currently there are 3 analysts that rate Goodrich Petroleum a buy, 2 analysts rate it a sell, and 10 rate it a hold.
The average volume for Goodrich Petroleum has been 3.7 million shares per day over the past 30 days. Goodrich has a market cap of $136.7 million and is part of the basic materials sector and energy industry. The stock has a beta of 3.47 and a short float of 59.8% with 4.42 days to cover. Shares are down 26.8% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Goodrich Petroleum as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 861.2% when compared to the same quarter one year ago, falling from -$23.50 million to -$225.83 million.
- Net operating cash flow has decreased to $26.56 million or 13.09% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, GOODRICH PETROLEUM CORP has marginally lower results.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 79.40%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 616.43% 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.
- GOODRICH PETROLEUM CORP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GOODRICH PETROLEUM CORP reported poor results of -$8.60 versus -$2.99 in the prior year. This year, the market expects an improvement in earnings (-$1.72 versus -$8.60).
- Despite the weak revenue results, GDP has outperformed against the industry average of 19.6%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full Goodrich Petroleum Ratings Report.
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