Trade-Ideas: Continental Resources (CLR) Is Today's

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 Continental Resources ( CLR) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Continental Resources as such a stock due to the following factors:

  • CLR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $258.8 million.
  • CLR has traded 62,993 shares today.
  • CLR is down 3.1% today.
  • CLR was up 5.9% yesterday.

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More details on CLR:

Continental Resources, Inc. is engaged in the exploration, development, and production of crude oil and natural gas properties in the north, south, and east regions of the United States. CLR has a PE ratio of 14.4. Currently there are 13 analysts that rate Continental Resources a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Continental Resources has been 3.9 million shares per day over the past 30 days. Continental has a market cap of $14.4 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.71 and a short float of 16% with 2.07 days to cover. Shares are down 32.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Continental Resources as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • CLR's very impressive revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues leaped by 101.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CONTINENTAL RESOURCES INC 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. This trend suggests that the performance of the business is improving. During the past fiscal year, CONTINENTAL RESOURCES INC increased its bottom line by earning $2.07 versus $2.03 in the prior year. This year, the market expects an improvement in earnings ($2.88 versus $2.07).
  • 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 on the basis of return on equity, CONTINENTAL RESOURCES INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The debt-to-equity ratio of 1.20 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, CLR maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.

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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