Watch Out: Barbarians At The Gate For Golar LNG (GLNG)
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 "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 Golar LNG as such a stock due to the following factors:
- GLNG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.7 million.
- GLNG has traded 1.5 million shares today.
- GLNG traded in a range 214.4% of the normal price range with a price range of $3.07.
- GLNG traded above its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 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.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in GLNG with the Ticky from Trade-Ideas. See the FREE profile for GLNG NOW at Trade-Ideas
More details on GLNG:
Golar LNG Limited, a midstream liquefied natural gas (LNG) company, is engaged in the transportation, regasification and liquefaction, and trading of LNG. The company operates in two segments, Vessel Operations and Commodity Trading. The stock currently has a dividend yield of 6.1%. GLNG has a PE ratio of 18.6. Currently there are 5 analysts that rate Golar LNG a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Golar LNG has been 2.2 million shares per day over the past 30 days. Golar LNG has a market cap of $2.8 billion and is part of the services sector and transportation industry. Shares are down 19.1% year-to-date as of the close of trading on Wednesday.
Analysis:
rates Golar LNG as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- GLNG's very impressive revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues leaped by 84.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels.
- Compared to its price level of one year ago, GLNG is down 8.44% to its most recent closing price of 31.37. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
- 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 Oil, Gas & Consumable Fuels industry and the overall market, GOLAR LNG LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $18.98 million or 16.90% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, GOLAR LNG LTD has marginally lower results.
- You can view the full Golar LNG Ratings Report.
null