Trade-Ideas: Whiting Petroleum (WLL) Is Today's "Barbarian At The Gate" 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 "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Whiting Petroleum as such a stock due to the following factors:
- WLL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $373.6 million.
- WLL has traded 11.0 million shares today.
- WLL traded in a range 214.6% of the normal price range with a price range of $4.52.
- WLL traded above its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on WLL:
Whiting Petroleum Corporation, an independent oil and gas company, acquires, explores, develops, and produces crude oil, natural gas liquids, and natural gas in the Rocky Mountains and Permian Basin regions of the United States. WLL has a PE ratio of 71.8. Currently there are 18 analysts that rate Whiting Petroleum a buy, 1 analyst rates it a sell, and 5 rate it a hold.
The average volume for Whiting Petroleum has been 8.8 million shares per day over the past 30 days. Whiting has a market cap of $6.4 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.01 and a short float of 9.7% with 1.21 days to cover. Shares are up 16.2% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Whiting Petroleum as a
. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
Highlights from the ratings report include:
- Despite the weak revenue results, WLL has outperformed against the industry average of 19.8%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for WHITING PETROLEUM CORP is currently very high, coming in at 71.37%. Regardless of WLL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WLL's net profit margin of -52.00% significantly underperformed when compared to the industry average.
- Net operating cash flow has declined marginally to $466.00 million or 5.01% when compared to the same quarter last year. Despite a decrease in cash flow of 5.01%, WHITING PETROLEUM CORP is in line with the industry average cash flow growth rate of -11.94%.
- WHITING 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, WHITING PETROLEUM CORP reported lower earnings of $0.81 versus $3.07 in the prior year. For the next year, the market is expecting a contraction of 194.4% in earnings (-$0.77 versus $0.81).
- 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 496.8% when compared to the same quarter one year ago, falling from -$59.27 million to -$353.68 million.
- You can view the full Whiting Petroleum Ratings Report.
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