Trade-Ideas LLC identified

California Resources

(

CRC

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

  • CRC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.7 million.
  • CRC has traded 2.1 million shares today.
  • CRC is trading at 5.19 times the normal volume for the stock at this time of day.
  • CRC is trading at a new low 14.01% 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 CRC:

California Resources Corporation operates as an oil and natural gas exploration and production company in the State of California. It produces oil, natural gas, and natural gas liquids. The company holds interests in approximately 2.4 million net acres. The stock currently has a dividend yield of 9.1%. Currently there is 1 analyst that rates California Resources a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for California Resources has been 10.9 million shares per day over the past 30 days. California has a market cap of $170.6 million and is part of the basic materials sector and energy industry. Shares are down 81.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates California Resources as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income 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 155.3% when compared to the same quarter one year ago, falling from $188.00 million to -$104.00 million.
  • The debt-to-equity ratio is very high at 2.73 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.44, which clearly demonstrates the inability to cover short-term cash needs.
  • The gross profit margin for CALIFORNIA RESOURCES CORP is rather high; currently it is at 50.32%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CRC's net profit margin of -16.61% significantly underperformed when compared to the industry average.
  • CRC, with its decline in revenue, underperformed when compared the industry average of 32.6%. Since the same quarter one year prior, revenues fell by 42.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • CALIFORNIA RESOURCES CORP 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. This year, the market expects an improvement in earnings (-$0.87 versus -$4.98).

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