Trade-Ideas: Helix Energy Solutions Group (HLX) Is Today's "Dead Cat Bounce" Stock

Trade-Ideas LLC identified Helix Energy Solutions Group (HLX) as a "dead cat bounce" (down big yesterday but up big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Helix Energy Solutions Group

(

HLX

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Helix Energy Solutions Group as such a stock due to the following factors:

  • HLX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.0 million.
  • HLX has traded 52,063 shares today.
  • HLX is up 3.1% today.
  • HLX was down 10.6% yesterday.

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More details on HLX:

Helix Energy Solutions Group, Inc., together with its subsidiaries, provides specialty services to the offshore energy industry primarily in the Gulf of Mexico, North Sea, the Asia Pacific, and West Africa regions. Currently there are 3 analysts that rate Helix Energy Solutions Group a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Helix Energy Solutions Group has been 1.9 million shares per day over the past 30 days. Helix Energy Solutions Group has a market cap of $793.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.76 and a short float of 7.9% with 4.32 days to cover. Shares are up 50.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Helix Energy Solutions Group as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, 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 Energy Equipment & Services industry. The net income has significantly decreased by 241.7% when compared to the same quarter one year ago, falling from $19.64 million to -$27.82 million.
  • 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 Energy Equipment & Services industry and the overall market, HELIX ENERGY SOLUTIONS GROUP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HELIX ENERGY SOLUTIONS GROUP is rather low; currently it is at 16.08%. It has decreased significantly from the same period last year.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.67%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 236.84% 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.
  • HELIX ENERGY SOLUTIONS GROUP 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, HELIX ENERGY SOLUTIONS GROUP swung to a loss, reporting -$3.58 versus $1.85 in the prior year. This year, the market expects an improvement in earnings (-$0.38 versus -$3.58).

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