Trade-Ideas LLC identified

Whiting Petroleum

(

WLL

) as a "perilous reversal" (up big yesterday but down 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 $237.3 million.
  • WLL has traded 1.2 million shares today.
  • WLL is down 3.2% today.
  • WLL was up 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 14 analysts that rate Whiting Petroleum a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Whiting Petroleum has been 27.1 million shares per day over the past 30 days. Whiting has a market cap of $1.5 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.15 and a short float of 25.7% with 1.43 days to cover. Shares are down 20.1% year-to-date as of the close of trading on Thursday.

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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 and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The debt-to-equity ratio of 1.09 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 0.58, 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 $150.14 million or 67.78% 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.
  • WLL'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 81.30%, 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. 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.
  • The gross profit margin for WHITING PETROLEUM CORP is rather high; currently it is at 62.58%. Regardless of WLL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WLL's net profit margin of -23.41% significantly underperformed when compared to the industry average.

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