Trade-Ideas LLC identified Stone Energy ( SGY) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Stone Energy as such a stock due to the following factors:

  • SGY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.6 million.
  • SGY has traded 82,009 shares today.
  • SGY is down 5.9% today.
  • SGY was up 6.5% yesterday.

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More details on SGY:

Stone Energy Corporation, an independent oil and natural gas company, engages in the acquisition, exploration, exploitation, development, and operation of oil and gas properties in the Gulf of Mexico and the Appalachia region. Currently there are 5 analysts that rate Stone Energy a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Stone Energy has been 3.1 million shares per day over the past 30 days. Stone Energy has a market cap of $288.3 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.43 and a short float of 28.2% with 3.29 days to cover. Shares are down 68.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Stone Energy 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 892.6% when compared to the same quarter one year ago, falling from -$29.42 million to -$291.97 million.
  • The debt-to-equity ratio is very high at 3.61 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, SGY maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
  • 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, STONE ENERGY 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 $53.32 million or 29.32% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, STONE ENERGY CORP has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.93%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 877.77% compared to the year-earlier quarter. 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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