Trade-Ideas LLC identified

Canadian Natural Resources

(

CNQ

) 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 Canadian Natural Resources as such a stock due to the following factors:

  • CNQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $115.8 million.
  • CNQ has traded 2.2 million shares today.
  • CNQ traded in a range 202.9% of the normal price range with a price range of $2.11.
  • CNQ traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 CNQ:

Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen, and synthetic crude oil (SCO). The stock currently has a dividend yield of 2.8%. Currently there are 7 analysts that rate Canadian Natural Resources a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Canadian Natural Resources has been 6.4 million shares per day over the past 30 days. Canadian Natural has a market cap of $27.7 billion and is part of the basic materials sector and energy industry. Shares are up 22.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Canadian Natural Resources as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • CANADIAN NATURAL RESOURCES 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CANADIAN NATURAL RESOURCES swung to a loss, reporting -$0.58 versus $3.57 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 89.1% when compared to the same quarter one year ago, falling from $1,198.00 million to $131.00 million.
  • CNQ's debt-to-equity ratio of 0.61 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. Despite the fact that CNQ's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.65 is low and demonstrates weak liquidity.
  • 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 on the basis of return on equity, CANADIAN NATURAL RESOURCES has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The share price of CANADIAN NATURAL RESOURCES has not done very well: it is down 11.61% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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