Energy XXI (EXXI): Heavy Pre-Market Activity

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 Energy XXI ( EXXI) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Energy XXI as such a stock due to the following factors:

  • EXXI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.1 million.
  • EXXI traded 2.9 million shares today in the pre-market hours as of 9:10 AM, representing 241.5% of its average daily volume.

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More details on EXXI:

Energy XXI (Bermuda) Limited is engaged in the acquisition, exploration, development, production, and operation of oil and natural gas properties onshore in Louisiana and Texas, and offshore in the Gulf of Mexico. The stock currently has a dividend yield of 1.7%. EXXI has a PE ratio of 2.9. Currently there are 8 analysts that rate Energy XXI a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Energy XXI has been 1.2 million shares per day over the past 30 days. Energy XXI has a market cap of $2.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.32 and a short float of 9.1% with 5.62 days to cover. Shares are down 11.9% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Energy XXI as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 20.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ENERGY XXI (BERMUDA) reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ENERGY XXI (BERMUDA) reported lower earnings of $1.84 versus $3.84 in the prior year.
  • The debt-to-equity ratio of 1.09 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, EXXI has a quick ratio of 0.50, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENERGY XXI (BERMUDA)'s return on equity is significantly below that of the industry average and is below that of the S&P 500.

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