Trade-Ideas LLC identified

Whiting Petroleum

(

WLL

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

  • WLL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $175.7 million.
  • WLL has traded 16.6 million shares today.
  • WLL is up 3.2% today.
  • WLL was down 5% yesterday.

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More details on WLL:

Whiting Petroleum Corporation, an independent oil and gas company, engages in the acquisition, exploration, development, and production of crude oil, natural gas liquids, and natural gas in the Rocky Mountains and Permian Basin regions of the United States. Currently there are 11 analysts that rate Whiting Petroleum a buy, no analysts rate it a sell, and 13 rate it a hold.

The average volume for Whiting Petroleum has been 24.0 million shares per day over the past 30 days. Whiting has a market cap of $2.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 3.61 and a short float of 17.3% with 1.63 days to cover. Shares are down 17.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Whiting Petroleum as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and deteriorating net income.

Highlights from the ratings report include:

  • The debt-to-equity ratio of 1.16 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, WLL has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, WHITING PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $45.95 million or 77.26% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 67.07%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 33.33% 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.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 61.9% when compared to the same quarter one year ago, falling from -$106.11 million to -$171.75 million.

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