Laredo Petroleum (LPI): Today's Weak On High Volume Stock

Trade-Ideas LLC identified Laredo Petroleum ( LPI) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Laredo Petroleum as such a stock due to the following factors:

  • LPI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.1 million.
  • LPI has traded 152,254 shares today.
  • LPI is trading at 2.25 times the normal volume for the stock at this time of day.
  • LPI is trading at a new low 5.02% 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 LPI:

Laredo Petroleum, Inc. operates as an independent energy company in the United States. It focuses on the acquisition, exploration, and development of oil and natural gas properties primarily in the Permian Basin in west Texas. Currently there are 5 analysts that rate Laredo Petroleum a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Laredo Petroleum has been 3.0 million shares per day over the past 30 days. Laredo has a market cap of $2.7 billion and is part of the basic materials sector and energy industry. The stock has a beta of -0.10 and a short float of 19.4% with 9.83 days to cover. Shares are up 21.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Laredo Petroleum as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The share price of LAREDO PETROLEUM INC has not done very well: it is down 23.47% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • 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 2000.8% when compared to the same quarter one year ago, falling from -$18.90 million to -$397.03 million.
  • 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, LAREDO PETROLEUM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $87.44 million or 21.91% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, LAREDO PETROLEUM INC has marginally lower results.
  • LAREDO PETROLEUM INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LAREDO PETROLEUM INC increased its bottom line by earning $1.85 versus $0.85 in the prior year. For the next year, the market is expecting a contraction of 89.3% in earnings ($0.20 versus $1.85).

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