Rex Energy (REXX) 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 Rex Energy ( REXX) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Rex Energy as such a stock due to the following factors:

  • REXX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.5 million.
  • REXX has traded 91,707 shares today.
  • REXX is up 8% today.
  • REXX was down 14.5% yesterday.

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More details on REXX:

Rex Energy Corporation operates as an independent oil and gas exploration and production company in the Appalachian and Illinois basins in the United States. REXX has a PE ratio of 43.0. Currently there are 7 analysts that rate Rex Energy a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Rex Energy has been 2.7 million shares per day over the past 30 days. Rex Energy has a market cap of $325.7 million and is part of the basic materials sector and energy industry. The stock has a beta of 0.58 and a short float of 22% with 2.49 days to cover. Shares are down 67.2% year-to-date as of the close of trading on Friday.

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 Rex Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 40.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • REX ENERGY 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, REX ENERGY CORP swung to a loss, reporting -$0.03 versus $1.07 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus -$0.03).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, REX ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • REXX'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 68.73%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, REXX is still more expensive than most of the 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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