Heavy Trading On Rosetta Resources (ROSE) Before Market Open

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 Rosetta Resources ( ROSE) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Rosetta Resources as such a stock due to the following factors:

  • ROSE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $85.3 million.
  • ROSE traded 354,849 shares today in the pre-market hours as of 8:54 AM, representing 10.3% of its average daily volume.

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More details on ROSE:

Rosetta Resources Inc., an independent exploration and production company, acquires and develops onshore energy resources in the United States. Currently there are 8 analysts that rate Rosetta Resources a buy, 1 analyst rates it a sell, and 11 rate it a hold.

The average volume for Rosetta Resources has been 3.5 million shares per day over the past 30 days. Rosetta has a market cap of $1.5 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.11 and a short float of 10.9% with 2.63 days to cover. Shares are down 10.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Rosetta Resources as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1631.3% when compared to the same quarter one year ago, falling from $35.24 million to -$539.67 million.
  • The debt-to-equity ratio of 1.37 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.32, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ROSETTA RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $107.67 million or 28.80% when compared to the same quarter last year. Despite a decrease in cash flow ROSETTA RESOURCES INC is still fairing well by exceeding its industry average cash flow growth rate of -51.31%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 59.33%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1577.19% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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