Today's Weak On High Volume Stock: VAALCO Energy (EGY) - TheStreet

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

VAALCO Energy

(

EGY

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified VAALCO Energy as such a stock due to the following factors:

  • EGY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.3 million.
  • EGY has traded 165,048 shares today.
  • EGY is trading at 2.47 times the normal volume for the stock at this time of day.
  • EGY is trading at a new low 7.05% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on EGY:

VAALCO Energy, Inc., an independent energy company, acquires, explores for, develops, and produces crude oil and natural gas. EGY has a PE ratio of 9.3. Currently there are 2 analysts that rate VAALCO Energy a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for VAALCO Energy has been 1.3 million shares per day over the past 30 days. VAALCO Energy has a market cap of $429.5 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.51 and a short float of 11.7% with 4.10 days to cover. Shares are up 7.1% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates VAALCO Energy as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • EGY's very impressive revenue growth greatly exceeded the industry average of 2.7%. Since the same quarter one year prior, revenues leaped by 78.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • EGY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.10, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 258.33% and other important driving factors, this stock has surged by 51.91% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EGY should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for VAALCO ENERGY INC is currently very high, coming in at 90.69%. It has increased significantly from the same period last year. Along with this, the net profit margin of 47.43% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 11228.81% to $64.10 million when compared to the same quarter last year. In addition, VAALCO ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -6.28%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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