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

  • PDCE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.0 million.
  • PDCE has traded 74,424 shares today.
  • PDCE is down 3.5% today.
  • PDCE was up 8.3% yesterday.

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More details on PDCE:

PDC Energy, Inc., an independent exploration and production company, acquires, explores for, develops, and produces crude oil, natural gas, and natural gas liquids in the United States. PDCE has a PE ratio of 46.2. Currently there are 13 analysts that rate PDC Energy a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for PDC Energy has been 1.2 million shares per day over the past 30 days. PDC Energy has a market cap of $1.6 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.07 and a short float of 16.4% with 4.11 days to cover. Shares are up 15.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PDC Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • PDCE's very impressive revenue growth greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues leaped by 212.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for PDC ENERGY INC is currently very high, coming in at 83.92%. It has increased significantly from the same period last year. Along with this, the net profit margin of 24.04% significantly outperformed against the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that PDCE's debt-to-equity ratio is low, the quick ratio, which is currently 0.50, displays a potential problem in covering short-term cash needs.
  • PDCE has underperformed the S&P 500 Index, declining 13.46% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • Net operating cash flow has declined marginally to $70.38 million or 9.21% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, PDC ENERGY INC has marginally lower results.

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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