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 PDC Energy ( PDCE) as a strong on high relative volume 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 $64.8 million.
  • PDCE has traded 102,631 shares today.
  • PDCE is trading at 4.28 times the normal volume for the stock at this time of day.
  • PDCE is trading at a new high 3.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 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. The company operates in two segments: Oil and Gas Exploration and Production, and Gas Marketing. PDCE has a PE ratio of 16. Currently there are 15 analysts that rate PDC Energy a buy, no analysts rate it a sell, and 3 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 $2.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.56 and a short float of 15.4% with 5.08 days to cover. Shares are up 32.9% year-to-date as of the close of trading on Friday.

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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 find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 38.3%. Since the same quarter one year prior, revenues rose by 17.9%. 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 81.04%. It has increased significantly from the same period last year. Along with this, the net profit margin of 11.79% is above that of the industry average.
  • The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that PDCE's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PDC ENERGY INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • PDCE has underperformed the S&P 500 Index, declining 10.29% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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