Stock To Watch: Laredo Petroleum (LPI) In Perilous Reversal
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 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 $59.6 million.
- LPI has traded 3.0 million shares today.
- LPI is down 3% today.
- LPI was up 11.6% 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 4 analysts that rate Laredo Petroleum a buy, 3 analysts rate it a sell, and 10 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 $2.4 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.38 and a short float of 22.8% with 4.31 days to cover. Shares are up 57.7% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Laredo Petroleum as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income 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.
- 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 ($0.24 versus -$10.46).
- This stock's share value has moved by only 27.73% over the past year. 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.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 31.8%. 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 -41.86%.
- You can view the full Laredo Petroleum Ratings Report.
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