Trade-Ideas LLC identified

Bill Barrett Corporation

(

BBG

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Bill Barrett Corporation as such a stock due to the following factors:

  • BBG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.1 million.
  • BBG has traded 201,019 shares today.
  • BBG is trading at 2.73 times the normal volume for the stock at this time of day.
  • BBG is trading at a new low 5.34% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on BBG:

Bill Barrett Corporation, an independent energy company, acquires, explores for, and develops oil and natural gas resources in the United States. Currently there are 6 analysts that rate Bill Barrett Corporation a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Bill Barrett Corporation has been 1.9 million shares per day over the past 30 days. Bill Barrett has a market cap of $141.9 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.12 and a short float of 25.1% with 8.67 days to cover. Shares are down 33.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Bill Barrett Corporation as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • 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 1084.2% when compared to the same quarter one year ago, falling from -$34.65 million to -$410.31 million.
  • The debt-to-equity ratio of 1.42 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, BBG maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
  • 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, BILL BARRETT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $74.76 million or 28.03% when compared to the same quarter last year. Despite a decrease in cash flow BILL BARRETT CORP is still fairing well by exceeding its industry average cash flow growth rate of -39.19%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 75.32%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1079.16% compared to the year-earlier 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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