Stock To Watch: Carbo Ceramics (CRR) In Perilous Reversal

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.

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

  • CRR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $38.9 million.
  • CRR has traded 60,388 shares today.
  • CRR is down 3.2% today.
  • CRR was up 17.9% yesterday.

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More details on CRR:

CARBO Ceramics Inc., an oilfield services technology company, manufactures and sells ceramic proppants, resin-coated ceramic, and resin-coated sand proppants for use in the hydraulic fracturing of natural gas and oil wells in the United States and internationally. The stock currently has a dividend yield of 1.1%. CRR has a PE ratio of 15.6. Currently there are no analysts that rate Carbo Ceramics a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Carbo Ceramics has been 903,900 shares per day over the past 30 days. Carbo Ceramics has a market cap of $873.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.89 and a short float of 44.4% with 9.07 days to cover. Shares are down 6.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Carbo Ceramics as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • CRR's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CRR's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CRR has a quick ratio of 2.03, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for CARBO CERAMICS INC is currently lower than what is desirable, coming in at 34.26%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.23% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $9.00 million or 86.43% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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