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 Goodrich Petroleum ( GDP) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Goodrich Petroleum as such a stock due to the following factors:
- GDP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.0 million.
- GDP has traded 502,284 shares today.
- GDP traded in a range 201% of the normal price range with a price range of $2.26.
- GDP traded above its daily resistance level (quality: 159 days, meaning that the stock is crossing a resistance level set by the last 159 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher. EXCLUSIVE OFFER: Get the inside scoop on opportunities in GDP with the Ticky from Trade-Ideas. See the FREE profile for GDP NOW at Trade-Ideas More details on GDP: Goodrich Petroleum Corporation, an independent oil and natural gas company, is engaged in the exploration, development, and production of oil and natural gas. Currently there are 11 analysts that rate Goodrich Petroleum a buy, 1 analyst rates it a sell, and 3 rate it a hold. The average volume for Goodrich Petroleum has been 2.1 million shares per day over the past 30 days. Goodrich has a market cap of $793.4 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.26 and a short float of 59.5% with 7.89 days to cover. Shares are up 8.1% 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 Goodrich Petroleum as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and weak operating cash flow. Highlights from the ratings report include:
- The debt-to-equity ratio of 1.36 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, GDP maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
- Net operating cash flow has significantly decreased to $30.56 million or 59.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GOODRICH PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for GOODRICH PETROLEUM CORP is currently very high, coming in at 77.00%. Regardless of GDP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GDP's net profit margin of -46.46% significantly underperformed when compared to the industry average.
- GOODRICH PETROLEUM CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GOODRICH PETROLEUM CORP reported poor results of -$2.99 versus -$2.48 in the prior year. This year, the market expects an improvement in earnings (-$1.45 versus -$2.99).
- You can view the full Goodrich Petroleum 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.