Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified SM Energy as such a stock due to the following factors:
- SM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $82.8 million.
- SM has traded 95,436 shares today.
- SM is trading at 2.17 times the normal volume for the stock at this time of day.
- SM is trading at a new low 3.19% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on SM:
SM Energy Company, an independent energy company, is engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in North America. The stock currently has a dividend yield of 0.2%. SM has a PE ratio of 18.8. Currently there are 9 analysts that rate SM Energy a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for SM Energy has been 1.2 million shares per day over the past 30 days. SM Energy has a market cap of $3.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.24 and a short float of 6.8% with 2.65 days to cover. Shares are down 29.8% year-to-date as of the close of trading on Tuesday.
rates SM Energy as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and generally higher debt management risk.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 21.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SM ENERGY CO's earnings per share declined by 22.1% 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, SM ENERGY CO turned its bottom line around by earning $2.52 versus -$0.84 in the prior year. This year, the market expects an improvement in earnings ($6.13 versus $2.52).
- 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 decreased by 21.9% when compared to the same quarter one year ago, dropping from $76.52 million to $59.78 million.
- Looking at the price performance of SM's shares over the past 12 months, there is not much good news to report: the stock is down 26.26%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full SM Energy Ratings Report.