Trade-Ideas LLC identified

Laredo Petroleum

(

LPI

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

  • LPI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.0 million.
  • LPI has traded 624,035 shares today.
  • LPI is down 3.1% today.
  • LPI was up 5.4% yesterday.

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More details on LPI:

Laredo Petroleum, Inc. operates as an independent energy company in the United States. It focuses on the acquisition, exploration, and development of oil and natural gas properties, as well as the transportation of oil and natural gas primarily in the Permian Basin in West Texas. Currently there are 6 analysts that rate Laredo Petroleum a buy, 2 analysts rate it a sell, and 11 rate it a hold.

The average volume for Laredo Petroleum has been 4.3 million shares per day over the past 30 days. Laredo has a market cap of $2.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.42 and a short float of 22.7% with 4.49 days to cover. Shares are up 26% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Laredo Petroleum as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 38114.2% when compared to the same quarter one year ago, falling from -$0.47 million to -$180.37 million.
  • This stock has managed to decline in share value by 3.49% over the past twelve months. 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.
  • LAREDO PETROLEUM INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, LAREDO PETROLEUM INC swung to a loss, reporting -$10.46 versus $1.85 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus -$10.46).
  • LPI, with its decline in revenue, slightly underperformed the industry average of 24.0%. Since the same quarter one year prior, revenues fell by 29.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly increased by 110.37% to $56.52 million when compared to the same quarter last year. In addition, LAREDO PETROLEUM INC has also vastly surpassed the industry average cash flow growth rate of -49.98%.

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