Eyes On Superior Energy Services (SPN): Highlighted Storm The Castle 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 Superior Energy Services ( SPN) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Superior Energy Services as such a stock due to the following factors:

  • SPN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.2 million.
  • SPN has traded 116,699 shares today.
  • SPN is trading at 3.02 times the normal volume for the stock at this time of day.
  • SPN crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on SPN:

Superior Energy Services, Inc. provides specialized oilfield services and equipment to oil and gas companies. The company operates in four segments: Drilling Products and Services; Onshore Completion and Workover Services; Production Services; and Subsea and Technical Solutions. The stock currently has a dividend yield of 1.2%. SPN has a PE ratio of 15.1. Currently there are 7 analysts that rate Superior Energy Services a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Superior Energy Services has been 1.8 million shares per day over the past 30 days. Superior Energy Services has a market cap of $4.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.31 and a short float of 1.7% with 1.19 days to cover. Shares are down 1.9% year-to-date as of the close of trading on Friday.

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 Superior Energy Services as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 0.8%. 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.
  • Despite currently having a low debt-to-equity ratio of 0.38, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that SPN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.83 is high and demonstrates strong liquidity.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 37.07% is the gross profit margin for SUPERIOR ENERGY SERVICES INC which we consider to be strong. Regardless of SPN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.87% trails 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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