VAALCO Energy (EGY) Is Weak 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 VAALCO Energy ( EGY) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified VAALCO Energy as such a stock due to the following factors:

  • EGY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.4 million.
  • EGY has traded 157,046 shares today.
  • EGY is trading at 3.48 times the normal volume for the stock at this time of day.
  • EGY is trading at a new low 11.05% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 EGY:

VAALCO Energy, Inc., an independent energy company, acquires, explores for, develops, and produces crude oil and natural gas. EGY has a PE ratio of 7.0. Currently there are 2 analysts that rate VAALCO Energy a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for VAALCO Energy has been 1.5 million shares per day over the past 30 days. VAALCO Energy has a market cap of $332.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.73 and a short float of 11.7% with 4.89 days to cover. Shares are down 22.5% year-to-date as of the close of trading on Monday.

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 VAALCO Energy as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

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 Oil, Gas & Consumable Fuels industry. The net income increased by 30.3% when compared to the same quarter one year prior, rising from $2.39 million to $3.11 million.
  • EGY's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.86, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, VAALCO ENERGY INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • In its most recent trading session, EGY 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has significantly decreased to $14.19 million or 69.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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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