Penn Virginia (PVA): Today's Weak On High Volume Stock

Trade-Ideas LLC identified Penn Virginia ( PVA) as a weak 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 $4.1 million.
  • PVA has traded 479,714 shares today.
  • PVA is trading at 3.94 times the normal volume for the stock at this time of day.
  • PVA is trading at a new low 10.43% 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 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 2 analysts that rate Penn Virginia a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Penn Virginia has been 4.1 million shares per day over the past 30 days. Penn Virginia has a market cap of $76.0 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.81 and a short float of 33.6% with 4.77 days to cover. Shares are down 84.3% year-to-date as of the close of trading on Friday.

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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 generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 2.40 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, PVA has a quick ratio of 0.55, 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.
  • PVA's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 90.56%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • PVA, with its decline in revenue, slightly underperformed the industry average of 34.5%. Since the same quarter one year prior, revenues fell by 40.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for PENN VIRGINIA CORP is currently very high, coming in at 73.36%. Regardless of PVA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PVA's net profit margin of -95.90% significantly underperformed when compared to the industry average.

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