Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Golar LNG

(

GLNG

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

  • GLNG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.1 million.
  • GLNG has traded 58,888 shares today.
  • GLNG is up 3.6% today.
  • GLNG was down 5.4% yesterday.

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More details on GLNG:

Golar LNG Limited, a midstream liquefied natural gas (LNG) company, engages in the transportation, regasification, liquefaction, and trading of LNG. The company operates in three segments: Vessel Operations, LNG Trading, and FLNG. The stock currently has a dividend yield of 4.2%. GLNG has a PE ratio of 27. Currently there are 6 analysts that rate Golar LNG a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Golar LNG has been 1.6 million shares per day over the past 30 days. Golar LNG has a market cap of $3.9 billion and is part of the services sector and transportation industry. The stock has a beta of 0.61 and a short float of 9.1% with 5.52 days to cover. Shares are up 25% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Golar LNG as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • GLNG's very impressive revenue growth greatly exceeded the industry average of 38.8%. Since the same quarter one year prior, revenues leaped by 74.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • The gross profit margin for GOLAR LNG LTD is currently extremely low, coming in at 7.31%. Regardless of GLNG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, GLNG's net profit margin of 60.00% significantly outperformed against the industry.
  • GLNG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 28.40%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GOLAR LNG LTD's return on equity significantly trails that of both the industry average and the S&P 500.

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