Given recent action, Bonanza Creek Energy Inc. (NYSE:BCEI) have dropped -35.26% to $0.50, it’s a good time to embark on a thorough market sentiment overview for Bonanza Creek Energy Inc. (BCEI).
For any investor, it’s imperative that you take the time to do a thorough checkup from time to time on any stock you own or are considering for your portfolio. Our goal will be to see what the market thinks of (BCEI). That means we are looking at valuations and technical trends for this stock. A quick valuation analysis for (BCEI) shows the following: The stock’s simple PE ratio is -0.13. That compares with a price-to-sales ratio (PSR) of 0.26. The PSR is useful because it is effectively an indicator of the value placed on each dollar of a company’s sales or revenues.
Right now, given that the market is valuing sales for the whole S&P 500 at 2.07, the simple way to view this is as a cheap stock based on market pricing relative to the top line. If we look a bit deeper, we can understand more about how the market is pricing the company in a more nuanced sense. For example, the stocks enterprise value taken as a ratio to its EBITDA is 24.05. That’ interesting because it allows us to take a look at, essentially, what has been invested and see it in comparison with what that investment is producing in pure earnings, before interest, taxes, and wear and tear have been stripped away.
Next let’s take a look at the chart and current dominant technical factors for (BCEI). After all, as the Wall Street maxim says, everything is “in the price”. Bonanza Creek Energy Inc. (NYSE:BCEI) has been trading in a bearish trend. This general trend determination is based on the time-tested method of pitting varying long time frame moving averages against one another and seeing what that relationship reveals. In this case, we are using the relationship between the 50-day (1.19) and 200-day (1.28) simple moving averages.
According to that measure, the stock has been seeing decreasing capital flows over the recent period. But how much weight should be given to this measure of trend? For that answer, the only tool we have with any established track record of viability is relative volume analysis. In this case, the relative volume measures have been weak, indicating a sense of apathy for the name by traders, investors, and money managers during the past month of action.
While this is not a perfect overview, it should grant some insight into how the market is valuing this stock at present.