Trade-Ideas LLC identified

Sanchez Energy

(

SN

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

  • SN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.4 million.
  • SN has traded 67,726 shares today.
  • SN is down 4.1% today.
  • SN was up 5% yesterday.

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More details on SN:

Sanchez Energy Corporation, an independent exploration and production company, engages in the exploration, acquisition, and development of oil and natural gas resources in the onshore U.S. Gulf Coast. Currently there are 3 analysts that rate Sanchez Energy a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Sanchez Energy has been 2.4 million shares per day over the past 30 days. Sanchez Energy has a market cap of $532.8 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.42 and a short float of 12.2% with 3.18 days to cover. Shares are up 102.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sanchez Energy as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to $24.14 million or 62.16% 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.
  • The gross profit margin for SANCHEZ ENERGY CORP is currently extremely low, coming in at 11.40%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, SN's net profit margin of -82.40% significantly underperformed when compared to the industry average.
  • SN has underperformed the S&P 500 Index, declining 23.52% 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.
  • SN, with its decline in revenue, slightly underperformed the industry average of 24.5%. Since the same quarter one year prior, revenues fell by 27.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • SANCHEZ ENERGY 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, SANCHEZ ENERGY CORP reported poor results of -$25.77 versus -$1.18 in the prior year. This year, the market expects an improvement in earnings (-$0.40 versus -$25.77).

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