Abraxas Petroleum (AXAS): Today's Weak On High Volume Stock

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 weak on high relative volume 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 $14.1 million.
  • AXAS has traded 550,977 shares today.
  • AXAS is trading at 2.25 times the normal volume for the stock at this time of day.
  • AXAS is trading at a new low 4.16% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 14.3. 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 2.7 million shares per day over the past 30 days. Abraxas has a market cap of $603.9 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.83 and a short float of 4.1% with 3.73 days to cover. Shares are up 69.6% 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 Abraxas Petroleum as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. 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 3.1%. 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.
  • Compared to its closing price of one year ago, AXAS's share price has jumped by 121.23%, 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.
  • The gross profit margin for ABRAXAS PETROLEUM CORP/NV is currently very high, coming in at 74.78%. It has increased significantly from the same period last year. Along with this, the net profit margin of 9.04% is above that of the industry average.
  • Net operating cash flow has significantly increased by 110.21% to $27.03 million when compared to the same quarter last year. In addition, ABRAXAS PETROLEUM CORP/NV has also vastly surpassed the industry average cash flow growth rate of -5.24%.
  • 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 ($0.52 versus $0.41).

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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