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.
Trade-Ideas LLC identified
) as a weak on high relative volume 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 $15.4 million.
- BAS has traded 283,840 shares today.
- BAS is trading at 2.77 times the normal volume for the stock at this time of day.
- BAS is trading at a new low 3.13% 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 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 6 analysts that rate Basic Energy Services a buy, 3 analysts rate it a sell, and 6 rate it a hold.
The average volume for Basic Energy Services has been 2.9 million shares per day over the past 30 days. Basic Energy Services has a market cap of $322.3 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.94 and a short float of 20% with 4.31 days to cover. Shares are up 7.8% year-to-date as of the close of trading on Wednesday.
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rates Basic Energy Services as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally high debt management risk and generally disappointing historical performance in the stock itself.
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 1610.7% when compared to the same quarter one year ago, falling from -$1.91 million to -$32.62 million.
- 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 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.
- The gross profit margin for BASIC ENERGY SERVICES INC is currently lower than what is desirable, coming in at 25.39%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -12.46% is significantly below that of the industry average.
- The debt-to-equity ratio is very high at 3.01 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, BAS has managed to keep a strong quick ratio of 1.76, which demonstrates the ability to cover short-term cash needs.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 72.33%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1520.00% compared to the year-earlier 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.
- You can view the full Basic Energy Services Ratings Report.