Weak On High Volume: Pioneer Natural Resources (PXD)

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

  • PXD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $438.9 million.
  • PXD has traded 567,847 shares today.
  • PXD is trading at 3.05 times the normal volume for the stock at this time of day.
  • PXD is trading at a new low 3.01% 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 PXD:

Pioneer Natural Resources Company engages in the exploration and production of oil and gas in the United States. The company produces and sells oil, natural gas liquids (NGLs), and gas. The stock currently has a dividend yield of 0.1%. PXD has a PE ratio of 28.1. Currently there are 18 analysts that rate Pioneer Natural Resources a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for Pioneer Natural Resources has been 2.1 million shares per day over the past 30 days. Pioneer Natural has a market cap of $23.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.77 and a short float of 6% with 3.14 days to cover. Shares are up 7.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pioneer Natural Resources as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that PXD's debt-to-equity ratio is low, the quick ratio, which is currently 0.64, displays a potential problem in covering short-term cash needs.
  • PXD, with its decline in revenue, slightly underperformed the industry average of 37.8%. Since the same quarter one year prior, revenues fell by 40.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PIONEER NATURAL RESOURCES CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for PIONEER NATURAL RESOURCES CO is rather low; currently it is at 20.97%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -12.58% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $104.00 million or 77.68% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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