Water-Logged And Getting Wetter Stock Of The Day: Ultra Petroleum Corporation (UPL)

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 Ultra Petroleum Corporation ( UPL) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ultra Petroleum Corporation as such a stock due to the following factors:

  • UPL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.8 million.
  • UPL has traded 3.1 million shares today.
  • UPL traded in a range 246.7% of the normal price range with a price range of $1.43.
  • UPL traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on UPL:

Ultra Petroleum Corp., an independent oil and gas company, engages in the acquisition, exploration, development, production, and operation of oil and natural gas properties in the United States. Currently there are 3 analysts that rate Ultra Petroleum Corporation a buy, 2 analysts rate it a sell, and 12 rate it a hold.

The average volume for Ultra Petroleum Corporation has been 2.7 million shares per day over the past 30 days. Ultra has a market cap of $3.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.49 and a short float of 23.4% with 15.78 days to cover. Shares are up 13.1% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ultra Petroleum Corporation as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • UPL has underperformed the S&P 500 Index, declining 8.67% from its price level of one year ago. 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.
  • UPL, with its decline in revenue, slightly underperformed the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 15.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ULTRA PETROLEUM CORP reported significant earnings per share improvement in the most recent quarter compared to 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, ULTRA PETROLEUM CORP swung to a loss, reporting -$14.24 versus $2.94 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus -$14.24).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 109.8% when compared to the same quarter one year prior, rising from -$1,186.98 million to $116.38 million.
  • The gross profit margin for ULTRA PETROLEUM CORP is rather high; currently it is at 68.13%. It has increased significantly from the same period last year. Along with this, the net profit margin of 48.16% significantly outperformed against the industry average.

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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