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

  • CLR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $220.9 million.
  • CLR has traded 1.4 million shares today.
  • CLR is trading at 2.51 times the normal volume for the stock at this time of day.
  • CLR is trading at a new low 3.00% 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 CLR:

Continental Resources, Inc. explores, develops, and produces crude oil and natural gas properties in the north, south, and east regions of the United States. Currently there are 10 analysts that rate Continental Resources a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Continental Resources has been 5.2 million shares per day over the past 30 days. Continental has a market cap of $8.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.90 and a short float of 29.3% with 2.72 days to cover. Shares are down 35.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Continental Resources as a hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • Along with the very weak revenue results, CLR underperformed when compared to the industry average of 36.9%. Since the same quarter one year prior, revenues plummeted by 58.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for CONTINENTAL RESOURCES INC is currently very high, coming in at 74.79%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CLR's net profit margin of -12.07% significantly underperformed when compared to the industry average.
  • CONTINENTAL RESOURCES 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, CONTINENTAL RESOURCES INC increased its bottom line by earning $2.64 versus $2.07 in the prior year. For the next year, the market is expecting a contraction of 107.6% in earnings (-$0.20 versus $2.64).
  • The debt-to-equity ratio of 1.48 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, CLR has a quick ratio of 0.70, 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 on the basis of return on equity, CONTINENTAL RESOURCES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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