Newfield Exploration (NFX) Is Weak On High Volume Today

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 Newfield Exploration ( NFX) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Newfield Exploration as such a stock due to the following factors:

  • NFX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $90.5 million.
  • NFX has traded 483,645 shares today.
  • NFX is trading at 6.67 times the normal volume for the stock at this time of day.
  • NFX is trading at a new low 4.00% 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 NFX:

Newfield Exploration Company, an independent energy company, engages in the exploration, development, and production of crude oil, natural gas, and natural gas liquids. NFX has a PE ratio of 8.3. Currently there are 12 analysts that rate Newfield Exploration a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Newfield Exploration has been 3.4 million shares per day over the past 30 days. Newfield has a market cap of $6.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.40 and a short float of 3.8% with 2.46 days to cover. Shares are up 43.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Newfield Exploration as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 2017.6% when compared to the same quarter one year prior, rising from $17.00 million to $360.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.74, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.38 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • NEWFIELD EXPLORATION CO 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NEWFIELD EXPLORATION CO increased its bottom line by earning $4.71 versus $0.79 in the prior year. For the next year, the market is expecting a contraction of 83.3% in earnings ($0.79 versus $4.71).
  • Net operating cash flow has declined marginally to $317.00 million or 9.42% when compared to the same quarter last year. Despite a decrease in cash flow NEWFIELD EXPLORATION CO is still fairing well by exceeding its industry average cash flow growth rate of -42.26%.

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