Atwood Oceanics (ATW) Highlighted As Today's Perilous Reversal Stock - TheStreet

Trade-Ideas LLC identified

Atwood Oceanics

(

ATW

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Atwood Oceanics as such a stock due to the following factors:

  • ATW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.5 million.
  • ATW has traded 68,897 shares today.
  • ATW is down 3.8% today.
  • ATW was up 5.6% yesterday.

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More details on ATW:

Atwood Oceanics, Inc., an offshore drilling contractor, engages in the drilling and completion of exploratory and developmental oil and gas wells worldwide. The stock currently has a dividend yield of 1.9%. ATW has a PE ratio of 2. Currently there are 4 analysts that rate Atwood Oceanics a buy, 2 analysts rate it a sell, and 9 rate it a hold.

The average volume for Atwood Oceanics has been 3.4 million shares per day over the past 30 days. Atwood Oceanics has a market cap of $996.3 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.54 and a short float of 24.9% with 4.33 days to cover. Shares are down 42.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Atwood Oceanics as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 30.8%. Since the same quarter one year prior, revenues rose by 12.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, ATWOOD OCEANICS's return on equity exceeds that of both the industry average and the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.57, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.21 is very high and demonstrates very strong liquidity.
  • ATWOOD OCEANICS has improved earnings per share by 34.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ATWOOD OCEANICS increased its bottom line by earning $6.65 versus $5.24 in the prior year. For the next year, the market is expecting a contraction of 44.4% in earnings ($3.70 versus $6.65).
  • ATW'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 58.71%, 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. 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.

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