Trade-Ideas LLC identified

Memorial Resource Development

(

MRD

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

  • MRD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.0 million.
  • MRD has traded 145,139 shares today.
  • MRD is up 8.2% today.
  • MRD was down 17.3% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in MRD with the Ticky from Trade-Ideas. See the FREE profile for MRD NOW at Trade-Ideas

More details on MRD:

Memorial Resource Development Corp., an independent natural gas and oil company, focuses on the acquisition, exploitation, and development of natural gas, natural gas liquids, and oil properties primarily in North Louisiana. MRD has a PE ratio of 9. Currently there are 11 analysts that rate Memorial Resource Development a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Memorial Resource Development has been 2.4 million shares per day over the past 30 days. Memorial Resource Development has a market cap of $2.2 billion and is part of the basic materials sector and energy industry. Shares are down 36.7% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Memorial Resource Development as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 3.26 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.40, which clearly demonstrates the inability to cover short-term cash needs.
  • MRD'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 40.66%, 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. 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.
  • Net operating cash flow has decreased to $136.63 million or 27.21% when compared to the same quarter last year. Despite a decrease in cash flow MEMORIAL RESOURCE DEV CORP is still fairing well by exceeding its industry average cash flow growth rate of -39.19%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 32.6%. Since the same quarter one year prior, revenues fell by 24.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • MEMORIAL RESOURCE DEV CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.37 versus -$3.97).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.