Trade-Ideas LLC identified

Basic Energy Services

(

BAS

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Basic Energy Services as such a stock due to the following factors:

  • BAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.2 million.
  • BAS has traded 55,937 shares today.
  • BAS is down 5.3% today.
  • BAS was up 15.5% yesterday.

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More details on BAS:

Basic Energy Services, Inc. provides well site services to oil and natural gas drilling and producing companies in the United States. Currently there are 5 analysts that rate Basic Energy Services a buy, 3 analysts rate it a sell, and 6 rate it a hold.

TheStreet Recommends

The average volume for Basic Energy Services has been 2.9 million shares per day over the past 30 days. Basic Energy Services has a market cap of $146.2 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.16 and a short float of 30.4% with 2.37 days to cover. Shares are down 41.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Basic Energy Services as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.

Highlights from the ratings report include:

  • 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 2076.9% when compared to the same quarter one year ago, falling from $2.44 million to -$48.30 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, BASIC ENERGY SERVICES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for BASIC ENERGY SERVICES INC is rather low; currently it is at 20.98%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -24.37% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $22.34 million or 65.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Although BAS's debt-to-equity ratio of 3.42 is very high, it is currently less than that of the industry average. Even though the debt-to-equity ratio is weak, BAS's quick ratio is somewhat strong at 1.46, demonstrating the ability to handle short-term liquidity needs.

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