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 "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Forest Oil as such a stock due to the following factors:
- FST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.3 million.
- FST has traded 2.8 million shares today.
- FST is down 3.4% today.
- FST was up 5.3% yesterday.
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More details on FST:
Forest Oil Corporation, an independent oil and gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids primarily in North America. Currently there are 4 analysts that rate Forest Oil a buy, 1 analyst rates it a sell, and 9 rate it a hold.
The average volume for Forest Oil has been 4.7 million shares per day over the past 30 days. Forest Oil has a market cap of $489.4 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.82 and a short float of 17.8% with 6.22 days to cover. Shares are down 38.9% year to date as of the close of trading on Thursday.
rates Forest Oil as a
. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- Net operating cash flow has decreased to $73.57 million or 32.74% 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.
- FST's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 35.99%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- FST, with its decline in revenue, underperformed when compared the industry average of 5.4%. Since the same quarter one year prior, revenues fell by 24.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- FOREST OIL 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, FOREST OIL CORP swung to a loss, reporting -$11.18 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($0.19 versus -$11.18).
- The gross profit margin for FOREST OIL CORP is currently very high, coming in at 77.38%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 1.87% trails the industry average.
- You can view the full Forest Oil Ratings Report.