Weak On High Volume: Rex Energy (REXX)

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 weak on high relative volume 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 $16.5 million.
  • REXX has traded 389,959 shares today.
  • REXX is trading at 2.30 times the normal volume for the stock at this time of day.
  • REXX is trading at a new low 5.15% 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 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 36.2. 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 2.9 million shares per day over the past 30 days. Rex Energy has a market cap of $274.3 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 3.17 days to cover. Shares are down 73.4% 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 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 74.75%, 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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