Strong On High Volume: Pioneer Energy Services (PES)

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

  • PES has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.4 million.
  • PES has traded 108,750 shares today.
  • PES is trading at 2.54 times the normal volume for the stock at this time of day.
  • PES is trading at a new high 5.01% 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 PES:

Pioneer Energy Services Corp., through its subsidiaries, provides contract land drilling services and production services in the United States and Colombia. PES has a PE ratio of 75.5. Currently there are 5 analysts that rate Pioneer Energy Services a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Pioneer Energy Services has been 1.1 million shares per day over the past 30 days. Pioneer Energy Services has a market cap of $530.2 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.17 and a short float of 5.9% with 1.55 days to cover. Shares are up 4.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pioneer Energy Services as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including poor profit margins and relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 299.9% when compared to the same quarter one year prior, rising from -$6.23 million to $12.45 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 12.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PIONEER ENERGY SERVICES CORP reported significant earnings per share improvement in the most recent quarter compared to 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, PIONEER ENERGY SERVICES CORP swung to a loss, reporting -$0.58 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($0.38 versus -$0.58).
  • In its most recent trading session, PES has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The gross profit margin for PIONEER ENERGY SERVICES CORP is currently lower than what is desirable, coming in at 34.46%. Regardless of PES's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PES's net profit margin of 4.55% is significantly lower than the industry average.

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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