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 "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Occidental Petroleum as such a stock due to the following factors:
- OXY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $357.9 million.
- OXY has traded 812,529 shares today.
- OXY is trading at 1.89 times the normal volume for the stock at this time of day.
- OXY crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on OXY:
Occidental Petroleum Corporation engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing and Other. The stock currently has a dividend yield of 3%. OXY has a PE ratio of 12.7. Currently there are 10 analysts that rate Occidental Petroleum a buy, no analysts rate it a sell, and 9 rate it a hold.
The average volume for Occidental Petroleum has been 3.3 million shares per day over the past 30 days. Occidental has a market cap of $75.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.00 and a short float of 1% with 2.03 days to cover. Shares are up 3.5% year-to-date as of the close of trading on Wednesday.
rates Occidental Petroleum as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, increase in net income, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- OXY's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 5.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 48.97% is the gross profit margin for OCCIDENTAL PETROLEUM CORP which we consider to be strong. Regardless of OXY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OXY's net profit margin of 22.80% significantly outperformed against the industry.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 8.2% when compared to the same quarter one year prior, going from $1,322.00 million to $1,431.00 million.
- OXY's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full Occidental Petroleum Ratings Report.