Trade-Ideas LLC identified

Stone Energy

(

SGY

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Stone Energy as such a stock due to the following factors:

  • SGY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.4 million.
  • SGY has traded 424,119 shares today.
  • SGY is trading at 2.18 times the normal volume for the stock at this time of day.
  • SGY is trading at a new low 5.49% 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 SGY:

Stone Energy Corporation, an independent oil and natural gas company, engages in the acquisition, exploration, exploitation, development, and operation of oil and gas properties in the Gulf of Mexico and the Appalachia region. Currently there is 1 analyst that rates Stone Energy a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Stone Energy has been 3.5 million shares per day over the past 30 days. Stone Energy has a market cap of $86.8 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.93 and a short float of 26.2% with 2.60 days to cover. Shares are down 61.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Stone Energy as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 91.05%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 65.99% compared to the year-earlier 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.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 67.3% when compared to the same quarter one year ago, falling from -$190.52 million to -$318.66 million.
  • Net operating cash flow has decreased to $48.49 million or 29.45% when compared to the same quarter last year. Despite a decrease in cash flow STONE ENERGY CORP is still fairing well by exceeding its industry average cash flow growth rate of -39.95%.
  • STONE ENERGY 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. 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, STONE ENERGY CORP reported poor results of -$19.74 versus -$3.41 in the prior year. This year, the market expects an improvement in earnings (-$1.34 versus -$19.74).
  • SGY, with its decline in revenue, slightly underperformed the industry average of 33.0%. Since the same quarter one year prior, revenues fell by 40.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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