Trade-Ideas: Basic Energy Services (BAS) Is Today's "Dead Cat Bounce" Stock - TheStreet

Trade-Ideas LLC identified

Basic Energy Services

(

BAS

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

  • BAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.1 million.
  • BAS has traded 119,500 shares today.
  • BAS is up 6.2% today.
  • BAS was down 14.5% yesterday.

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More details on BAS:

Basic Energy Services, Inc. provides well site services to oil and natural gas drilling and producing companies in the United States. Currently there are 4 analysts that rate Basic Energy Services a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Basic Energy Services has been 3.9 million shares per day over the past 30 days. Basic Energy Services has a market cap of $162.0 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.46 and a short float of 33.8% with 3.50 days to cover. Shares are down 45.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Basic Energy Services as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself 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 Energy Equipment & Services industry. The net income has significantly decreased by 1163.8% when compared to the same quarter one year ago, falling from $9.93 million to -$105.64 million.
  • The debt-to-equity ratio is very high at 5.28 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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 Energy Equipment & Services industry and the overall market, BASIC ENERGY SERVICES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 73.46%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1195.83% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • BASIC ENERGY SERVICES INC 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BASIC ENERGY SERVICES INC continued to lose money by earning -$0.20 versus -$0.89 in the prior year. For the next year, the market is expecting a contraction of 2060.0% in earnings (-$4.32 versus -$0.20).

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