Trade-Ideas: Golar LNG (GLNG) Is Today's "Barbarian At The Gate" Stock - TheStreet

Trade-Ideas LLC identified

Golar LNG

(

GLNG

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Golar LNG as such a stock due to the following factors:

  • GLNG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.6 million.
  • GLNG has traded 770,753 shares today.
  • GLNG traded in a range 203% of the normal price range with a price range of $3.09.
  • GLNG traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on GLNG:

Golar LNG Limited, a midstream liquefied natural gas (LNG) company, engages in the transportation, regasification, liquefaction, and trading of LNG. The company operates in three segments: Vessel Operations, LNG Trading, and FLNG. The stock currently has a dividend yield of 6.4%. GLNG has a PE ratio of 18. Currently there are 8 analysts that rate Golar LNG a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Golar LNG has been 1.4 million shares per day over the past 30 days. Golar LNG has a market cap of $2.5 billion and is part of the services sector and transportation industry. The stock has a beta of 1.03 and a short float of 10.3% with 7.30 days to cover. Shares are down 26.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Golar LNG as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • 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 89.4% when compared to the same quarter one year prior, rising from -$24.23 million to -$2.56 million.
  • Despite the weak revenue results, GLNG has significantly outperformed against the industry average of 36.7%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • GLNG's debt-to-equity ratio of 0.83 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.
  • GLNG'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 46.38%, 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.
  • Net operating cash flow has significantly decreased to -$15.22 million or 120.73% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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