Perilous Reversal Watch: Crosstex Energy (XTEX)

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 Crosstex Energy ( XTEX) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Crosstex Energy as such a stock due to the following factors:

  • XTEX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.8 million.
  • XTEX has traded 256,602 shares today.
  • XTEX is down 3.5% today.
  • XTEX was up 33.4% yesterday.

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More details on XTEX:

Crosstex Energy, L.P. operates as an independent midstream energy company. The stock currently has a dividend yield of 6.7%. Currently there are 2 analysts that rate Crosstex Energy a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Crosstex Energy has been 366,200 shares per day over the past 30 days. Crosstex 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 0.96 and a short float of 1.6% with 0.98 days to cover. Shares are up 35.8% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Crosstex Energy as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 15.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $52.46 million or 28.23% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.07%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CROSSTEX ENERGY LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CROSSTEX ENERGY LP is currently extremely low, coming in at 12.92%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.33% trails that of 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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