Abraxas Petroleum (AXAS) In A Perilous Reversal

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 Abraxas Petroleum ( AXAS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Abraxas Petroleum as such a stock due to the following factors:

  • AXAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.5 million.
  • AXAS has traded 69,032 shares today.
  • AXAS is down 3.2% today.
  • AXAS was up 5.5% yesterday.

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More details on AXAS:

Abraxas Petroleum Corporation, an independent energy company, is engaged in the acquisition, exploitation, development, and production of oil and gas in the United States and Canada. AXAS has a PE ratio of 9.4. Currently there are 6 analysts that rate Abraxas Petroleum a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Abraxas Petroleum has been 3.1 million shares per day over the past 30 days. Abraxas has a market cap of $465.2 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.82 and a short float of 4.1% with 2.48 days to cover. Shares are up 52.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Abraxas Petroleum as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • AXAS's very impressive revenue growth greatly exceeded the industry average of 2.1%. Since the same quarter one year prior, revenues leaped by 56.1%. 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.
  • AXAS's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Compared to its closing price of one year ago, AXAS's share price has jumped by 99.19%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AXAS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ABRAXAS PETROLEUM CORP/NV has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, ABRAXAS PETROLEUM CORP/NV turned its bottom line around by earning $0.41 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.41).
  • 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. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, ABRAXAS PETROLEUM CORP/NV has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.

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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