Noble Energy (NBL) Marked As A Barbarian At The Gate

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

  • NBL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $308.4 million.
  • NBL has traded 2.7 million shares today.
  • NBL traded in a range 229.4% of the normal price range with a price range of $3.92.
  • NBL traded above its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 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.

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More details on NBL:

Noble Energy, Inc., an independent energy company, is engaged in the exploration and production of crude oil and natural gas properties worldwide. The stock currently has a dividend yield of 1.1%. NBL has a PE ratio of 34.3. Currently there are 14 analysts that rate Noble Energy a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Noble Energy has been 2.2 million shares per day over the past 30 days. Noble Energy has a market cap of $24.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.64 and a short float of 1.8% with 1.20 days to cover. Shares are down 2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Noble Energy as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.5%. Since the same quarter one year prior, revenues rose by 20.3%. 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.
  • Net operating cash flow has significantly increased by 53.61% to $828.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 18.80%.
  • The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.88 is somewhat weak and could be cause for future problems.
  • The gross profit margin for NOBLE ENERGY INC is currently very high, coming in at 77.65%. Regardless of NBL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NBL's net profit margin of 14.34% compares favorably to the industry average.
  • NOBLE ENERGY INC's earnings per share declined by 47.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, NOBLE ENERGY INC reported lower earnings of $2.49 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($3.11 versus $2.49).

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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