Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Halcon Resources as such a stock due to the following factors:
- HK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.2 million.
- HK has traded 4.2 million shares today.
- HK traded in a range 213.9% of the normal price range with a price range of $0.44.
- HK traded below its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on HK:
Halcon Resources Corporation, an independent energy company, engages in the acquisition, production, exploration, and development of onshore oil and natural gas properties in the United States. HK has a PE ratio of 15.2. Currently there are 10 analysts that rate Halcon Resources a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for Halcon Resources has been 5.5 million shares per day over the past 30 days. Halcon has a market cap of $1.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.10 and a short float of 23.8% with 7.32 days to cover. Shares are down 31.8% year to date as of the close of trading on Friday.
rates Halcon Resources as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- HK's very impressive revenue growth greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues leaped by 816.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 384.2% when compared to the same quarter one year prior, rising from $7.66 million to $37.09 million.
- HALCON RESOURCES CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HALCON RESOURCES CORP reported poor results of -$1.24 versus -$0.06 in the prior year. This year, the market expects an improvement in earnings ($0.20 versus -$1.24).
- HK has underperformed the S&P 500 Index, declining 23.95% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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 0.39, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full Halcon Resources Ratings Report.