Trade-Ideas LLC identified

Bonanza Creek Energy

(

BCEI

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Bonanza Creek Energy as such a stock due to the following factors:

  • BCEI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.6 million.
  • BCEI has traded 1.9 million shares today.
  • BCEI is trading at 4.04 times the normal volume for the stock at this time of day.
  • BCEI is trading at a new high 10.19% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 BCEI:

Bonanza Creek Energy Inc., an independent energy company, engages in the acquisition, exploration, development, and production of onshore oil and associated liquids-rich natural gas in the United States. Currently there is 1 analyst that rates Bonanza Creek Energy a buy, 4 analysts rate it a sell, and 16 rate it a hold.

The average volume for Bonanza Creek Energy has been 5.1 million shares per day over the past 30 days. Bonanza Creek Energy has a market cap of $156.3 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.35 and a short float of 39.2% with 3.10 days to cover. Shares are down 60.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Bonanza Creek Energy as a

sell

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

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 156.4% when compared to the same quarter one year ago, falling from -$18.42 million to -$47.24 million.
  • 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, BONANZA CREEK ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for BONANZA CREEK ENERGY INC is currently lower than what is desirable, coming in at 31.54%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -106.93% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $26.53 million or 17.32% when compared to the same quarter last year. Despite a decrease in cash flow BONANZA CREEK ENERGY INC is still fairing well by exceeding its industry average cash flow growth rate of -49.17%.
  • The debt-to-equity ratio is very high at 6.63 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, BCEI has managed to keep a strong quick ratio of 2.19, which demonstrates the ability to cover short-term cash needs.

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