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

  • LEI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.8 million.
  • LEI has traded 631,589 shares today.
  • LEI is trading at 12.39 times the normal volume for the stock at this time of day.
  • LEI is trading at a new low 11.00% 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 LEI:

Lucas Energy, Inc. operates as an independent oil and gas company in the United States.

The average volume for Lucas Energy has been 173,100 shares per day over the past 30 days. Lucas Energy has a market cap of $4.1 million and is part of the basic materials sector and energy industry. The stock has a beta of 0.76 and a short float of 13.6% with 0.09 days to cover. Shares are down 61.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lucas Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$0.47 million or 443.02% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LEI has underperformed the S&P 500 Index, declining 18.88% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, LUCAS ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • LEI, with its very weak revenue results, has greatly underperformed against the industry average of 34.6%. Since the same quarter one year prior, revenues plummeted by 73.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.03 is very weak and demonstrates a lack of ability to pay short-term obligations.

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