Trade-Ideas LLC identified

Ensco

(

ESV

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

  • ESV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $73.9 million.
  • ESV has traded 955,583 shares today.
  • ESV is up 3.1% today.
  • ESV was down 6.1% yesterday.

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More details on ESV:

Ensco plc provides offshore contract drilling services to the oil and gas industry worldwide. It operates through three segments: Floaters, Jackups, and Other. The stock currently has a dividend yield of 0.4%. Currently there are no analysts that rate Ensco a buy, 6 analysts rate it a sell, and 11 rate it a hold.

The average volume for Ensco has been 12.5 million shares per day over the past 30 days. Ensco has a market cap of $3.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.72 and a short float of 7.6% with 2.08 days to cover. Shares are down 38.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ensco as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has decreased to $238.70 million or 47.99% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly 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 60.55%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 46.37% 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.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Energy Equipment & Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 46.0% when compared to the same quarter one year ago, falling from $324.70 million to $175.30 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, ENSCO PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ESV's debt-to-equity ratio of 0.87 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.30 is sturdy.

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