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 Bonanza Creek Energy ( BCEI) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Bonanza Creek Energy as such a stock due to the following factors:
- BCEI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.3 million.
- BCEI has traded 448,086 shares today.
- BCEI is trading at 1.76 times the normal volume for the stock at this time of day.
- BCEI crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend. EXCLUSIVE OFFER: Get the inside scoop on opportunities in BCEI with the Ticky from Trade-Ideas. See the FREE profile for BCEI NOW at Trade-Ideas More details on BCEI: Bonanza Creek Energy, Inc., together with its subsidiaries, operates as an independent energy company in the United States. BCEI has a PE ratio of 28.1. Currently there are 8 analysts that rate Bonanza Creek Energy a buy, no analysts rate it a sell, and 4 rate it a hold. The average volume for Bonanza Creek Energy has been 781,800 shares per day over the past 30 days. Bonanza Creek 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 2.78 and a short float of 7% with 1.87 days to cover. Shares are up 3.2% year-to-date as of the close of trading on Thursday. 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 Bonanza Creek Energy as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- BCEI's very impressive revenue growth greatly exceeded the industry average of 7.9%. Since the same quarter one year prior, revenues leaped by 80.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BONANZA CREEK ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BONANZA CREEK ENERGY INC increased its bottom line by earning $1.72 versus $1.11 in the prior year. This year, the market expects an improvement in earnings ($2.79 versus $1.72).
- 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 94.9% when compared to the same quarter one year prior, rising from $13.05 million to $25.43 million.
- The gross profit margin for BONANZA CREEK ENERGY INC is currently very high, coming in at 85.17%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.11% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 95.70% to $125.76 million when compared to the same quarter last year. In addition, BONANZA CREEK ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -23.15%.
- You can view the full Bonanza Creek Energy Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.