Penn Virginia (PVA) Flagged As Strong On High Volume

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 Penn Virginia ( PVA) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Penn Virginia as such a stock due to the following factors:

  • PVA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.9 million.
  • PVA has traded 555,655 shares today.
  • PVA is trading at 2.61 times the normal volume for the stock at this time of day.
  • PVA is trading at a new high 3.15% 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 PVA:

Penn Virginia Corporation, an independent oil and gas company, explores, develops, and produces crude oil, natural gas liquids, and natural gas in various onshore regions of the United States. Currently there are 4 analysts that rate Penn Virginia a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Penn Virginia has been 3.5 million shares per day over the past 30 days. Penn Virginia has a market cap of $321.7 million and is part of the basic materials sector and energy industry. The stock has a beta of 3.05 and a short float of 40.6% with 7.35 days to cover. Shares are down 32.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Penn Virginia 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 397.3% when compared to the same quarter one year ago, falling from $19.23 million to -$57.17 million.
  • Currently the debt-to-equity ratio of 1.98 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, PVA has a quick ratio of 0.63, this demonstrates the lack of ability of the company to cover short-term liquidity 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, PENN VIRGINIA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $45.55 million or 31.56% when compared to the same quarter last year. Despite a decrease in cash flow PENN VIRGINIA CORP is still fairing well by exceeding its industry average cash flow growth rate of -53.29%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 73.41%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 500.00% 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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