Trade-Ideas LLC identified

Callon Petroleum

(

CPE

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

  • CPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.8 million.
  • CPE has traded 50,284 shares today.
  • CPE is up 3.4% today.
  • CPE was down 6.2% yesterday.

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More details on CPE:

Callon Petroleum Company engages in the exploration, development, acquisition, and production of oil and natural gas properties in the Permian Basin in West Texas. CPE has a PE ratio of 27. Currently there are 11 analysts that rate Callon Petroleum a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Callon Petroleum has been 2.0 million shares per day over the past 30 days. Callon has a market cap of $502.4 million and is part of the basic materials sector and energy industry. The stock has a beta of 0.06 and a short float of 9% with 2.42 days to cover. Shares are up 32.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Callon Petroleum as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 52.64% to $23.86 million when compared to the same quarter last year. In addition, CALLON PETROLEUM CO/DE has also vastly surpassed the industry average cash flow growth rate of -19.71%.
  • The debt-to-equity ratio is somewhat low, currently at 0.78, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.44 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Despite the weak revenue results, CPE has significantly outperformed against the industry average of 34.6%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 204.8% when compared to the same quarter one year ago, falling from $4.74 million to -$4.97 million.
  • The share price of CALLON PETROLEUM CO/DE has not done very well: it is down 18.06% 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. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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