Today's Weak On High Volume Stock: Crescent Point Energy (CPG)

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

  • CPG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.4 million.
  • CPG has traded 273,483 shares today.
  • CPG is trading at 5.24 times the normal volume for the stock at this time of day.
  • CPG is trading at a new low 4.05% 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 CPG:

Crescent Point Energy Corp. acquires, explores, develops, and produces oil and natural gas properties in Western Canada and the United States. The stock currently has a dividend yield of 6.4%. Currently there are 6 analysts that rate Crescent Point Energy a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Crescent Point Energy has been 1.2 million shares per day over the past 30 days. Crescent Point Energy has a market cap of $6.8 billion and is part of the basic materials sector and energy industry. Shares are up 20.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Crescent Point Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally high debt management risk 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 178.0% when compared to the same quarter one year ago, falling from $258.06 million to -$201.37 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, CRESCENT POINT ENERGY CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that CPG's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.51 is low and demonstrates weak liquidity.
  • Net operating cash flow has declined marginally to $547.19 million or 6.15% when compared to the same quarter last year. Despite a decrease in cash flow CRESCENT POINT ENERGY CORP is still fairing well by exceeding its industry average cash flow growth rate of -39.44%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 45.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 166.66% 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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