Trade-Ideas LLC identified

Oasis Petroleum

(

OAS

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

  • OAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.6 million.
  • OAS has traded 1.5 million shares today.
  • OAS is up 3.4% today.
  • OAS was down 9.5% yesterday.

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More details on OAS:

Oasis Petroleum Inc., an independent exploration and production company, focuses on the acquisition and development of unconventional oil and natural gas resources in the North Dakota and Montana regions of the Williston Basin. OAS has a PE ratio of 4. Currently there are 11 analysts that rate Oasis Petroleum a buy, no analysts rate it a sell, and 14 rate it a hold.

The average volume for Oasis Petroleum has been 13.9 million shares per day over the past 30 days. Oasis has a market cap of $687.2 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.97 and a short float of 32.5% with 3.53 days to cover. Shares are down 39.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Oasis Petroleum as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and deteriorating net income.

Highlights from the ratings report include:

  • The gross profit margin for OASIS PETROLEUM INC is rather high; currently it is at 64.09%. Regardless of OAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAS's net profit margin of 13.71% significantly outperformed against the industry.
  • OAS, with its decline in revenue, underperformed when compared the industry average of 32.6%. Since the same quarter one year prior, revenues fell by 46.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to $50.45 million or 73.05% 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 debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, OAS has a quick ratio of 0.51, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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