Trade-Ideas: Penn Virginia Corporation (PVA) Is Today's

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 Penn Virginia Corporation ( PVA) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Penn Virginia Corporation 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 $20.9 million.
  • PVA has traded 310,144 shares today.
  • PVA is down 3.2% today.
  • PVA was up 6.2% yesterday.

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More details on PVA:

Penn Virginia Corporation, an independent oil and gas company, engages in the exploration and development of natural gas and oil properties in various onshore regions of the United States. The stock currently has a dividend yield of 3.6%. Currently there are 9 analysts that rate Penn Virginia Corporation a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Penn Virginia Corporation has been 1.4 million shares per day over the past 30 days. Penn Virginia has a market cap of $370.1 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.67 and a short float of 17.6% with 2.76 days to cover. Shares are up 28.6% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Penn Virginia Corporation as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 351.2% when compared to the same quarter one year ago, falling from -$5.64 million to -$25.44 million.
  • The debt-to-equity ratio of 1.28 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, PVA maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. 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.
  • The share price of PENN VIRGINIA CORP has not done very well: it is down 20.97% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • PENN VIRGINIA CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 continued to lose money by earning -$2.14 versus -$2.91 in the prior year. This year, the market expects an improvement in earnings (-$0.67 versus -$2.14).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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