ION Geophysical Corporation (IO) Marked As A Dead Cat Bounce Stock

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 ION Geophysical Corporation ( IO) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified ION Geophysical Corporation as such a stock due to the following factors:

  • IO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.3 million.
  • IO has traded 13.9 million shares today.
  • IO is up 7.5% today.
  • IO was down 21.7% yesterday.

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More details on IO:

ION Geophysical Corporation provides planning and seismic processing services, software, and acquisition equipment to the energy industry worldwide. Currently there are 4 analysts that rate ION Geophysical Corporation a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for ION Geophysical Corporation has been 1.4 million shares per day over the past 30 days. ION Geophysical has a market cap of $695.7 million and is part of the technology sector and electronics industry. The stock has a beta of 3.30 and a short float of 3.5% with 1.25 days to cover. Shares are down 32% year to date as of the close of trading on Wednesday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ION Geophysical Corporation as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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 Energy Equipment & Services industry. The net income has significantly decreased by 672.0% when compared to the same quarter one year ago, falling from $12.38 million to -$70.80 million.
  • 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 Energy Equipment & Services industry and the overall market, ION GEOPHYSICAL 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 -$6.00 million or 117.69% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 662.50% compared to the year-earlier 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.
  • ION GEOPHYSICAL CORP has experienced 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ION GEOPHYSICAL CORP increased its bottom line by earning $0.39 versus $0.16 in the prior year. For the next year, the market is expecting a contraction of 56.4% in earnings ($0.17 versus $0.39).

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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