Water-Logged And Getting Wetter Stock Of The Day: PBF Energy (PBF)

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 PBF Energy ( PBF) 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 PBF Energy as such a stock due to the following factors:

  • PBF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $95.5 million.
  • PBF has traded 240,833 shares today.
  • PBF traded in a range 244.8% of the normal price range with a price range of $1.79.
  • PBF traded below its daily resistance level (quality: 64 days, meaning that the stock is crossing a resistance level set by the last 64 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 PBF:

PBF Energy Inc., together with its subsidiaries, is engaged in the refining and supply of petroleum products. The stock currently has a dividend yield of 3.7%. PBF has a PE ratio of 15.1. Currently there are 4 analysts that rate PBF Energy a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for PBF Energy has been 1.7 million shares per day over the past 30 days. PBF Energy has a market cap of $2.2 billion and is part of the basic materials sector and energy industry. Shares are down 0.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PBF Energy as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, increase in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 579.0% when compared to the same quarter one year prior, rising from $11.41 million to $77.44 million.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.47 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The gross profit margin for PBF ENERGY INC is currently extremely low, coming in at 6.95%. Regardless of PBF's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.63% trails 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PBF ENERGY INC'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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