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Trade-Ideas LLC identified

Callon Petroleum

(

CPE

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Callon Petroleum as such a stock due to the following factors:

  • CPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.3 million.
  • CPE has traded 152,055 shares today.
  • CPE is up 3.3% today.
  • CPE was down 5.2% yesterday.

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More details on CPE:

Callon Petroleum Company engages in the exploration, development, acquisition, and production of oil and natural gas properties in the Permian Basin in West Texas. Currently there are 13 analysts that rate Callon Petroleum a buy, no analysts rate it a sell, and 2 rate it a hold.

TheStreet Recommends

The average volume for Callon Petroleum has been 2.9 million shares per day over the past 30 days. Callon has a market cap of $778.2 million and is part of the basic materials sector and energy industry. The stock has a beta of 0.56 and a short float of 11.2% with 3.17 days to cover. Shares are up 72.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Callon Petroleum as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • Compared to its closing price of one year ago, CPE's share price has jumped by 57.27%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Net operating cash flow has increased to $25.55 million or 15.59% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -26.26%.
  • Despite the weak revenue results, CPE has outperformed against the industry average of 36.7%. Since the same quarter one year prior, revenues fell by 13.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.09 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
  • 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, CALLON PETROLEUM CO/DE's return on equity significantly trails that of both the industry average and the S&P 500.

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