Trade-Ideas: Range Resources (RRC) Is Today's Strong On High Relative Volume 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 strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Range Resources as such a stock due to the following factors:
- RRC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $155.6 million.
- RRC has traded 251,597 shares today.
- RRC is trading at 2.41 times the normal volume for the stock at this time of day.
- RRC is trading at a new high 3.01% 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 RRC:
Range Resources Corporation, an independent natural gas, natural gas liquids (NGLs), and oil company, engages in the acquisition, exploration, and development of natural gas and oil properties in the United States. The stock currently has a dividend yield of 0.3%. RRC has a PE ratio of 13.1. Currently there are 14 analysts that rate Range Resources a buy, no analysts rate it a sell, and 9 rate it a hold.
The average volume for Range Resources has been 3.2 million shares per day over the past 30 days. Range has a market cap of $8.4 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.41 and a short float of 12.2% with 5.82 days to cover. Shares are down 4.8% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Range Resources as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.
Highlights from the ratings report include:
- RRC's very impressive revenue growth greatly exceeded the industry average of 19.6%. Since the same quarter one year prior, revenues leaped by 101.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 908.3% when compared to the same quarter one year prior, rising from $28.17 million to $284.05 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, RANGE RESOURCES CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- RRC'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 45.39%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- RRC's debt-to-equity ratio of 0.89 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.25 is very low and demonstrates very weak liquidity.
- You can view the full Range Resources Ratings Report.
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