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

  • WPX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $120.8 million.
  • WPX has traded 12.0 million shares today.
  • WPX is down 3.1% today.
  • WPX was up 6.8% yesterday.

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More details on WPX:

WPX Energy, Inc., an independent oil and natural gas exploration and production company, engages in the exploitation and development of unconventional properties in the United States. Currently there are 12 analysts that rate WPX Energy a buy, 2 analysts rate it a sell, and 5 rate it a hold.

The average volume for WPX Energy has been 12.3 million shares per day over the past 30 days. WPX Energy has a market cap of $2.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.38 and a short float of 14.9% with 2.96 days to cover. Shares are up 56.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates WPX Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:
  • WPX ENERGY 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, WPX ENERGY INC swung to a loss, reporting -$0.02 versus $0.62 in the prior year. For the next year, the market is expecting a contraction of 3750.0% in earnings (-$0.77 versus -$0.02).
  • 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 117.9% when compared to the same quarter one year ago, falling from $67.00 million to -$12.00 million.
  • Net operating cash flow has significantly decreased to $16.00 million or 91.75% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.56%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 108.00% 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.
  • WPX's debt-to-equity ratio of 0.87 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.20 is very low and demonstrates very weak liquidity.

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