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

  • XCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.3 million.
  • XCO has traded 2.3 million shares today.
  • XCO is trading at 11.56 times the normal volume for the stock at this time of day.
  • XCO is trading at a new low 30.29% 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 XCO:

EXCO Resources, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, exploitation, development, and production of onshore oil and natural gas properties with a focus on shale resource plays in the United States. Currently there are no analysts that rate EXCO Resources a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for EXCO Resources has been 3.6 million shares per day over the past 30 days. EXCO has a market cap of $511.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.01 and a short float of 18.3% with 8.06 days to cover. Shares are up 41.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates EXCO Resources 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 $27.98 million or 50.50% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, EXCO RESOURCES INC has marginally lower results.
  • XCO has underperformed the S&P 500 Index, declining 10.99% 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.
  • XCO, with its decline in revenue, slightly underperformed the industry average of 32.0%. Since the same quarter one year prior, revenues fell by 40.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • EXCO RESOURCES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXCO RESOURCES INC swung to a loss, reporting -$4.38 versus $0.44 in the prior year. This year, the market expects an improvement in earnings (-$0.46 versus -$4.38).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 59.1% when compared to the same quarter one year prior, rising from -$318.11 million to -$130.15 million.

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