Trade-Ideas LLC identified

Range Resources

(

RRC

) 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 Range Resources as such a stock due to the following factors:

  • RRC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $137.0 million.
  • RRC has traded 154,916 shares today.
  • RRC traded in a range 225.4% of the normal price range with a price range of $4.14.
  • RRC traded below its daily resistance level (quality: 527 days, meaning that the stock is crossing a resistance level set by the last 527 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 RRC:

TST Recommends

Range Resources Corporation, an independent natural gas, natural gas liquids (NGLs), and oil company, engages in the acquisition, exploration, and development of natural gas and oil properties in the United States. The stock currently has a dividend yield of 0.6%. RRC has a PE ratio of 14. Currently there are 14 analysts that rate Range Resources a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Range Resources has been 4.3 million shares per day over the past 30 days. Range has a market cap of $4.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.21 and a short float of 16.4% with 4.49 days to cover. Shares are down 46.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Range Resources as a

hold

. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:

  • RRC, with its decline in revenue, underperformed when compared the industry average of 34.1%. Since the same quarter one year prior, revenues fell by 49.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, RANGE RESOURCES CORP's return on equity is below that of both the industry average and the S&P 500.
  • RANGE RESOURCES CORP 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, RANGE RESOURCES CORP increased its bottom line by earning $3.78 versus $0.70 in the prior year. For the next year, the market is expecting a contraction of 93.4% in earnings ($0.25 versus $3.78).
  • 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 169.2% when compared to the same quarter one year ago, falling from $171.39 million to -$118.59 million.
  • The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.23, which clearly demonstrates the inability to cover short-term cash needs.

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