Trade-Ideas LLC identified Encana ( ECA) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Encana as such a stock due to the following factors:
- ECA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $118.8 million.
- ECA has traded 1.1 million shares today.
- ECA is trading at 2.13 times the normal volume for the stock at this time of day.
- ECA 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in ECA with the Ticky from Trade-Ideas. See the FREE profile for ECA NOW at Trade-Ideas More details on ECA: Encana Corporation, together with its subsidiaries, engages in the development, exploration, production, and marketing of natural gas, oil, and natural gas liquids in Canada and the United States. The stock currently has a dividend yield of 0.8%. Currently there are 6 analysts that rate Encana a buy, 2 analysts rate it a sell, and 8 rate it a hold. The average volume for Encana has been 18.3 million shares per day over the past 30 days. Encana has a market cap of $6.6 billion and is part of the basic materials sector and energy industry. Shares are up 49.9% year-to-date as of the close of trading on Thursday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Encana as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. 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 409.1% when compared to the same quarter one year ago, falling from $198.00 million to -$612.00 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, ENCANA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 45.58%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 366.66% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- ENCANA CORP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ENCANA CORP swung to a loss, reporting -$6.35 versus $4.59 in the prior year. This year, the market expects an improvement in earnings (-$0.25 versus -$6.35).
- Along with the very weak revenue results, ECA underperformed when compared to the industry average of 34.1%. Since the same quarter one year prior, revenues plummeted by 54.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full Encana Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.