Trade-Ideas LLC identified

Wpx Energy

(

WPX

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Wpx Energy as such a stock due to the following factors:

  • WPX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.1 million.
  • WPX has traded 817,147 shares today.
  • WPX is trading at 2.78 times the normal volume for the stock at this time of day.
  • WPX is trading at a new low 6.12% 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 WPX:

WPX Energy, Inc., an independent natural gas and oil exploration and production company, engages in the exploitation and development of unconventional properties in the United States. WPX has a PE ratio of 6. Currently there are 5 analysts that rate Wpx Energy a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Wpx Energy has been 11.5 million shares per day over the past 30 days. Wpx Energy has a market cap of $1.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.39 and a short float of 17% with 3.07 days to cover. Shares are down 38.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Wpx Energy as a

sell

. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The gross profit margin for WPX ENERGY INC is currently lower than what is desirable, coming in at 30.28%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -10.56% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $236.00 million or 24.84% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, WPX ENERGY INC has marginally lower results.
  • WPX'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 68.10%, 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WPX ENERGY INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • WPX ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WPX ENERGY INC turned its bottom line around by earning $0.62 versus -$5.43 in the prior year. For the next year, the market is expecting a contraction of 135.5% in earnings (-$0.22 versus $0.62).

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