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

  • SN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.6 million.
  • SN has traded 56,853 shares today.
  • SN is up 4.5% today.
  • SN was down 5.6% yesterday.

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More details on SN: Sanchez Energy Corporation, an independent exploration and production company, engages in the exploration, acquisition, and development of oil and natural gas resources in the onshore U.S. Gulf Coast. Currently there are 3 analysts that rate Sanchez Energy a buy, no analysts rate it a sell, and 7 rate it a hold. The average volume for Sanchez Energy has been 2.2 million shares per day over the past 30 days. Sanchez Energy has a market cap of $554.5 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.58 and a short float of 15.7% with 2.97 days to cover. Shares are up 118.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sanchez Energy as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to $43.39 million or 69.58% 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.
  • SN'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 46.76%, 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.
  • SN, with its decline in revenue, slightly underperformed the industry average of 34.2%. Since the same quarter one year prior, revenues fell by 36.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • SANCHEZ ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SANCHEZ ENERGY CORP reported poor results of -$25.77 versus -$1.18 in the prior year. This year, the market expects an improvement in earnings (-$0.25 versus -$25.77).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 136.2% when compared to the same quarter one year prior, rising from -$62.11 million to $22.49 million.

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