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Trade-Ideas LLC identified

Bonanza Creek Energy

(

BCEI

) 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 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 $23.0 million.
  • BCEI has traded 1.9 million shares today.
  • BCEI traded in a range 252.5% of the normal price range with a price range of $1.80.
  • BCEI traded above its daily resistance level (quality: 17 days, meaning that the stock is crossing a resistance level set by the last 17 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 BCEI:

TheStreet Recommends

Bonanza Creek Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of onshore oil and associated liquids natural gas in the United States. Currently there are 14 analysts that rate Bonanza Creek Energy a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Bonanza Creek Energy has been 2.4 million shares per day over the past 30 days. Bonanza Creek Energy has a market cap of $295.0 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.45 and a short float of 24.9% with 3.61 days to cover. Shares are down 72.1% year-to-date as of the close of trading on Friday.

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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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally high debt management risk.

Highlights from the ratings report include:

  • BONANZA CREEK ENERGY INC 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, BONANZA CREEK ENERGY INC reported lower earnings of $0.40 versus $1.72 in the prior year. For the next year, the market is expecting a contraction of 230.0% in earnings (-$0.52 versus $0.40).
  • 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 3648.7% when compared to the same quarter one year ago, falling from $1.16 million to -$41.17 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.
  • Net operating cash flow has significantly decreased to $16.07 million or 79.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 89.80%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2866.66% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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