Flotek Industries (FTK) Is Today's Dead Cat Bounce Stock

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 Flotek Industries ( FTK) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Flotek Industries as such a stock due to the following factors:

  • FTK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.9 million.
  • FTK has traded 934,872 shares today.
  • FTK is up 3.8% today.
  • FTK was down 5.8% yesterday.

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More details on FTK:

Flotek Industries, Inc. develops and supplies oilfield products, services, and equipment to the oil, gas, and mining industries in the United States and internationally. FTK has a PE ratio of 17. Currently there are 2 analysts that rate Flotek Industries a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Flotek Industries has been 1.0 million shares per day over the past 30 days. Flotek has a market cap of $677.1 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.73 and a short float of 20.2% with 4.90 days to cover. Shares are down 36.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Flotek Industries as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • FTK's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.94 is somewhat weak and could be cause for future problems.
  • FTK, with its decline in revenue, slightly underperformed the industry average of 14.2%. Since the same quarter one year prior, revenues fell by 19.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for FLOTEK INDUSTRIES INC is currently lower than what is desirable, coming in at 34.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.83% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $6.46 million or 58.34% 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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