Stock To Watch: Basic Energy Services (BAS) In 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 Basic Energy Services ( BAS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Basic Energy Services as such a stock due to the following factors:

  • BAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.2 million.
  • BAS has traded 56,902 shares today.
  • BAS is down 3.3% today.
  • BAS was up 5.2% yesterday.

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More details on BAS:

Basic Energy Services, Inc. provides well site services to oil and natural gas drilling and producing companies in the United States. BAS has a PE ratio of 185.8. Currently there are 8 analysts that rate Basic Energy Services a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Basic Energy Services has been 2.1 million shares per day over the past 30 days. Basic Energy Services has a market cap of $481.5 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.59 and a short float of 11.6% with 1.18 days to cover. Shares are down 30.2% year-to-date as of the close of trading on Thursday.

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 Basic Energy Services as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • BAS's revenue growth has slightly outpaced the industry average of 15.4%. Since the same quarter one year prior, revenues rose by 21.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 242.8% when compared to the same quarter one year prior, rising from -$6.96 million to $9.93 million.
  • BASIC ENERGY SERVICES INC 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, BASIC ENERGY SERVICES INC swung to a loss, reporting -$0.89 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus -$0.89).
  • Net operating cash flow has declined marginally to $37.77 million or 2.60% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • BAS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 30.70%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.

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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