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 "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Penn Virginia as such a stock due to the following factors:
- PVA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.9 million.
- PVA has traded 3.3 million shares today.
- PVA traded in a range 207.9% of the normal price range with a price range of $1.72.
- PVA traded below its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on PVA:
Penn Virginia Corporation, an independent oil and gas company, is engaged in the exploration, development, and production of crude oil, natural gas liquids, and natural gas in various onshore regions of the United States. Currently there are 8 analysts that rate Penn Virginia a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Penn Virginia has been 2.9 million shares per day over the past 30 days. Penn Virginia has a market cap of $1.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.00 and a short float of 21.3% with 7.47 days to cover. Shares are up 74.8% year-to-date as of the close of trading on Thursday.
rates Penn Virginia as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and disappointing return on equity.
Highlights from the ratings report include:
- PVA's very impressive revenue growth greatly exceeded the industry average of 3.0%. Since the same quarter one year prior, revenues leaped by 58.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 166.66% and other important driving factors, this stock has surged by 232.48% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- PENN VIRGINIA 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, PENN VIRGINIA CORP reported poor results of -$2.36 versus -$2.14 in the prior year. This year, the market expects an improvement in earnings (-$0.02 versus -$2.36).
- Currently the debt-to-equity ratio of 1.57 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, PVA has a quick ratio of 0.69, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PENN VIRGINIA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Penn Virginia Ratings Report.