Pioneer Natural Resources (PXD) Falls Further As It's Water-Logged And Getting Wetter

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 Pioneer Natural Resources ( PXD) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Pioneer Natural Resources as such a stock due to the following factors:

  • PXD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $258.7 million.
  • PXD has traded 801,557 shares today.
  • PXD traded in a range 213.7% of the normal price range with a price range of $8.88.
  • PXD traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on PXD:

Pioneer Natural Resources Company operates as an independent oil and gas exploration and production company in the United States. The company produces and sells oil, natural gas liquids (NGL), and gas. The stock currently has a dividend yield of 0%. Currently there are 15 analysts that rate Pioneer Natural Resources a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Pioneer Natural Resources has been 1.3 million shares per day over the past 30 days. Pioneer Natural has a market cap of $33.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.79 and a short float of 3.1% with 3.47 days to cover. Shares are up 26.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pioneer Natural Resources as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 34.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 63.49% and other important driving factors, this stock has surged by 50.24% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although PXD had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • PIONEER NATURAL RESOURCES CO 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, PIONEER NATURAL RESOURCES CO swung to a loss, reporting -$3.02 versus $3.89 in the prior year. This year, the market expects an improvement in earnings ($5.57 versus -$3.02).
  • The gross profit margin for PIONEER NATURAL RESOURCES CO is rather high; currently it is at 64.05%. Regardless of PXD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PXD's net profit margin of 11.63% compares favorably to the industry average.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, PIONEER NATURAL RESOURCES CO's return on equity significantly trails that of both the industry average and the S&P 500.

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