Strong On High Volume: Bill Barrett Corporation (BBG)

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

  • BBG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.3 million.
  • BBG has traded 132,436 shares today.
  • BBG is trading at 2.89 times the normal volume for the stock at this time of day.
  • BBG is trading at a new high 4.02% 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 BBG:

Bill Barrett Corporation, an independent energy company, acquires, explores for, and develops oil and natural gas resources in the United States. Currently there are 7 analysts that rate Bill Barrett Corporation a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Bill Barrett Corporation has been 1.5 million shares per day over the past 30 days. Bill Barrett has a market cap of $631.1 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.30 and a short float of 16.2% with 4.57 days to cover. Shares are down 53.5% year-to-date as of the close of trading on Wednesday.

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 Bill Barrett Corporation as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • BBG'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 53.28%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BILL BARRETT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • BBG, with its decline in revenue, slightly underperformed the industry average of 6.4%. Since the same quarter one year prior, revenues slightly dropped by 9.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • BILL BARRETT 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, BILL BARRETT CORP swung to a loss, reporting -$4.06 versus $0.01 in the prior year. This year, the market expects an improvement in earnings (-$0.22 versus -$4.06).
  • The gross profit margin for BILL BARRETT CORP is rather high; currently it is at 63.73%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -25.61% is in-line with 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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