Today's Perilous Reversal Stock: Callon Petroleum (CPE)
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down 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 $54.2 million.
- CPE has traded 1.8 million shares today.
- CPE is down 3.1% today.
- CPE was up 5.8% yesterday.
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More details on CPE:
Callon Petroleum Company, an independent oil and natural gas company, acquires, explores for, develops, and produces oil and natural gas properties in the Permian Basin in West Texas. Currently there are 13 analysts that rate Callon Petroleum a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Callon Petroleum has been 4.1 million shares per day over the past 30 days. Callon has a market cap of $820.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.63 and a short float of 13.6% with 2.46 days to cover. Shares are up 28.8% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Callon Petroleum as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk and feeble growth in its earnings per share.
Highlights from the ratings report include:
- 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 303.1% when compared to the same quarter one year ago, falling from -$10.20 million to -$41.11 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CALLON PETROLEUM CO/DE's return on equity significantly trails that of both the industry average and the S&P 500.
- CPE's debt-to-equity ratio of 0.70 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CPE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.59 is low and demonstrates weak liquidity.
- CALLON PETROLEUM CO/DE has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CALLON PETROLEUM CO/DE swung to a loss, reporting -$3.62 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($0.03 versus -$3.62).
- Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- You can view the full Callon Petroleum Ratings Report.
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