Trade-Ideas LLC identified

Patterson-UTI Energy

(

PTEN

) 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 Patterson-UTI Energy as such a stock due to the following factors:

  • PTEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $91.7 million.
  • PTEN has traded 3.2 million shares today.
  • PTEN traded in a range 227.5% of the normal price range with a price range of $1.89.
  • PTEN traded below its daily resistance level (quality: 57 days, meaning that the stock is crossing a resistance level set by the last 57 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 PTEN:

Patterson-UTI Energy, Inc., through its subsidiaries, provides onshore contract drilling services to major and independent oil and natural gas operators in the United States and Canada. The company operates through three segments: Contract Drilling, Pressure Pumping, and Oil and Natural Gas. The stock currently has a dividend yield of 0.4%. Currently there are 11 analysts that rate Patterson-UTI Energy a buy, 4 analysts rate it a sell, and 8 rate it a hold.

The average volume for Patterson-UTI Energy has been 3.6 million shares per day over the past 30 days. Patterson-UTI Energy has a market cap of $2.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.00 and a short float of 13.2% with 3.81 days to cover. Shares are up 27.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Patterson-UTI Energy as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • PATTERSON-UTI ENERGY INC 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, PATTERSON-UTI ENERGY INC swung to a loss, reporting -$2.01 versus $1.11 in the prior year. For the next year, the market is expecting a contraction of 16.9% in earnings (-$2.35 versus -$2.01).
  • 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 Energy Equipment & Services industry. The net income has significantly decreased by 872.6% when compared to the same quarter one year ago, falling from $9.13 million to -$70.50 million.
  • 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 Energy Equipment & Services industry and the overall market on the basis of return on equity, PATTERSON-UTI ENERGY INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Net operating cash flow has significantly decreased to $113.73 million or 71.91% 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.
  • PTEN, with its very weak revenue results, has greatly underperformed against the industry average of 21.6%. Since the same quarter one year prior, revenues plummeted by 59.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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