Forest Oil (FST) Is Strong On High Volume Today

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 Forest Oil ( FST) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Forest Oil as such a stock due to the following factors:

  • FST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.2 million.
  • FST has traded 280,994 shares today.
  • FST is trading at 2.18 times the normal volume for the stock at this time of day.
  • FST is trading at a new high 4.76% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 FST:

Forest Oil Corporation, an independent oil and gas company, is engaged in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids primarily in North America. FST has a PE ratio of 30.7. Currently there are no analysts that rate Forest Oil a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Forest Oil has been 2.6 million shares per day over the past 30 days. Forest Oil has a market cap of $109.7 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.02 and a short float of 22% with 5.83 days to cover. Shares are down 70.9% 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 Forest Oil as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 78.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 353.57% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 347.4% when compared to the same quarter one year ago, falling from $33.44 million to -$82.72 million.
  • Net operating cash flow has significantly decreased to $4.89 million or 93.57% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • FOREST OIL CORP 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, FOREST OIL CORP turned its bottom line around by earning $0.61 versus -$11.18 in the prior year. For the next year, the market is expecting a contraction of 136.1% in earnings (-$0.22 versus $0.61).
  • The revenue fell significantly faster than the industry average of 6.7%. Since the same quarter one year prior, revenues fell by 48.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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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