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 $48.1 million.
  • ATW has traded 296,530 shares today.
  • ATW is down 3.1% today.
  • ATW was up 6.7% 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 2.6%. ATW has a PE ratio of 2. Currently there are 2 analysts that rate Atwood Oceanics a buy, 4 analysts rate it a sell, and 7 rate it a hold.

The average volume for Atwood Oceanics has been 4.8 million shares per day over the past 30 days. Atwood Oceanics has a market cap of $705.0 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.40 and a short float of 47.5% with 5.13 days to cover. Shares are up 13.5% year-to-date as of the close of trading on Wednesday.

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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 largely solid financial position with reasonable debt levels by most measures, notable return on equity and reasonable valuation levels. 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 current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.97, which clearly demonstrates the ability to cover short-term cash needs.
  • 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. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, ATWOOD OCEANICS's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Despite the weak revenue results, ATW has outperformed against the industry average of 35.7%. Since the same quarter one year prior, revenues fell by 15.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Energy Equipment & Services industry average. The net income has decreased by 0.2% when compared to the same quarter one year ago, dropping from $122.67 million to $122.44 million.
  • 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 65.16%, which is also worse than the performance of the S&P 500 Index. 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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