Trade-Ideas LLC identified

Superior Energy Services

(

SPN

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

  • SPN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.6 million.
  • SPN has traded 221,027 shares today.
  • SPN is trading at 2.04 times the normal volume for the stock at this time of day.
  • SPN is trading at a new low 3.02% 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 SPN:

Superior Energy Services, Inc. provides specialized oilfield services and equipment to crude oil and natural gas exploration and production companies in the United States, the Gulf of Mexico, and internationally. The stock currently has a dividend yield of 1.8%. Currently there are 15 analysts that rate Superior Energy Services a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Superior Energy Services has been 3.6 million shares per day over the past 30 days. Superior Energy Services has a market cap of $2.6 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.05 and a short float of 8.2% with 3.52 days to cover. Shares are up 30.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Superior Energy Services as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 Energy Equipment & Services industry. The net income has significantly decreased by 679.5% when compared to the same quarter one year ago, falling from -$11.14 million to -$86.80 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market, SUPERIOR ENERGY SERVICES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SUPERIOR ENERGY SERVICES INC is currently lower than what is desirable, coming in at 30.93%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has significantly decreased to $62.54 million or 73.75% 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.
  • The share price of SUPERIOR ENERGY SERVICES INC has not done very well: it is down 6.28% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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