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 or Stephanie Link.
Trade-Ideas LLC identified
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Range Resources Corporation as such a stock due to the following factors:
- RRC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $196.2 million.
- RRC has traded 1.3 million shares today.
- RRC is trading at 1.74 times the normal volume for the stock at this time of day.
- RRC crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on RRC:
Range Resources Corporation operates as an independent natural gas, natural gas liquids (NGLs), and oil company in the United States. It engages in the acquisition, exploration, and development of natural gas and oil properties. The stock currently has a dividend yield of 0.2%. RRC has a PE ratio of 189.0. Currently there are 13 analysts that rate Range Resources Corporation a buy, no analysts rate it a sell, and 12 rate it a hold.
The average volume for Range Resources Corporation has been 1.3 million shares per day over the past 30 days. Range has a market cap of $12.7 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.92 and a short float of 7.6% with 3.99 days to cover. Shares are up 23.3% year to date as of the close of trading on Friday.
rates Range Resources Corporation as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, expanding profit margins, impressive record of earnings per share growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 30.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 158.6% when compared to the same quarter one year prior, rising from $55.68 million to $143.98 million.
- The gross profit margin for RANGE RESOURCES CORP is currently very high, coming in at 78.43%. Regardless of RRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RRC's net profit margin of 24.41% significantly outperformed against the industry.
- RANGE RESOURCES 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, RANGE RESOURCES CORP reported lower earnings of $0.06 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $0.06).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full Range Resources Corporation Ratings Report.