PDC Energy (PDCE) Marked As A Dead Cat Bounce 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 PDC Energy ( PDCE) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified PDC Energy as such a stock due to the following factors:

  • PDCE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.9 million.
  • PDCE has traded 55,384 shares today.
  • PDCE is up 11% today.
  • PDCE was down 7.4% yesterday.

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More details on PDCE:

PDC Energy, Inc., an independent exploration and production company, acquires, explores for, develops, and produces crude oil, natural gas, and natural gas liquids in the United States. PDCE has a PE ratio of 32.5. Currently there are 14 analysts that rate PDC Energy a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for PDC Energy has been 983,400 shares per day over the past 30 days. PDC Energy has a market cap of $1.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.07 and a short float of 13.8% with 2.89 days to cover. Shares are down 42.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PDC Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • PDCE's very impressive revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues leaped by 212.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that PDCE's debt-to-equity ratio is low, the quick ratio, which is currently 0.50, displays a potential problem in covering short-term cash needs.
  • PDCE'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 48.59%, 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.
  • Net operating cash flow has declined marginally to $70.38 million or 9.21% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, PDC ENERGY INC has marginally lower results.


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