Today's Dead Cat Bounce Stock: Bill Barrett Corporation (BBG) - TheStreet

Trade-Ideas LLC identified

Bill Barrett Corporation

(

BBG

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Bill Barrett Corporation as such a stock due to the following factors:

  • BBG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.4 million.
  • BBG has traded 133,202 shares today.
  • BBG is up 3% today.
  • BBG was down 6% yesterday.

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More details on BBG:

Bill Barrett Corporation, an independent energy company, acquires, explores for, and develops oil and natural gas resources in the United States. Currently there are 8 analysts that rate Bill Barrett Corporation a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Bill Barrett Corporation has been 2.6 million shares per day over the past 30 days. Bill Barrett has a market cap of $317.2 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.96 and a short float of 29.5% with 5.05 days to cover. Shares are down 47.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Bill Barrett Corporation as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1084.2% when compared to the same quarter one year ago, falling from -$34.65 million to -$410.31 million.
  • The debt-to-equity ratio of 1.42 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, BBG maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, BILL BARRETT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $74.76 million or 28.03% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, BILL BARRETT CORP has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 53.14%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1079.16% 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.

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