Trade-Ideas: Synergy Resources (SYRG) Is Today's Weak On High Relative Volume 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 Synergy Resources ( SYRG) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Synergy Resources as such a stock due to the following factors:

  • SYRG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.3 million.
  • SYRG has traded 116,959 shares today.
  • SYRG is trading at 2.75 times the normal volume for the stock at this time of day.
  • SYRG is trading at a new low 7.02% 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 SYRG:

Synergy Resources Corporation engages in the acquisition, development, exploitation, exploration, and production of oil and natural gas properties primarily located in the Denver-Julesburg Basin in northeast Colorado. SYRG has a PE ratio of 24.7. Currently there are 12 analysts that rate Synergy Resources a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Synergy Resources has been 1.0 million shares per day over the past 30 days. Synergy has a market cap of $724.0 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.96 and a short float of 11.7% with 4.62 days to cover. Shares are down 1.4% 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 Synergy Resources as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • SYRG's very impressive revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues leaped by 147.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SYNERGY RESOURCES CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SYNERGY RESOURCES CORP increased its bottom line by earning $0.37 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.37).
  • 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 947.4% when compared to the same quarter one year prior, rising from $1.00 million to $10.43 million.
  • The gross profit margin for SYNERGY RESOURCES CORP is currently very high, coming in at 84.47%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.77% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 626.33% to $28.16 million when compared to the same quarter last year. In addition, SYNERGY RESOURCES CORP has also vastly surpassed the industry average cash flow growth rate of -1.72%.

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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