Shares of Patterson-UTI Energy Inc (PTEN) are moving on volatility today 3.42% or 0.61 from the open. The NASDAQ listed company saw a recent bid of 18.47 and 3294431 shares have traded hands in the session.
Investors are constantly looking to find winning stocks that have been largely overlooked. With markets still riding high, this may not be the easiest thing in the world right now. Finding those perfect stocks before they become household names may take a lot of research and homework. Many investors will apply various strategies for picking stocks. If there was one that worked for everybody, it would make things super easy. Of course, this is not the case. Obviously, there are no guarantees in the stock market. Some investors may only focus on the fundamentals of a company and completely ignore the technicals. Others may choose to only watch technicals and never take a look at the underlying company information. Combining both areas of research may help give a better feel of what is going on with the stock in the long term and the short term. Individual investors who manage their own portfolios may need to put in a lot more time than those who don’t. Successful investors often have an uncanny way of filtering out the noise and keeping their focus on the right information.
Now let’s take a look at how the fundamentals are stacking up for Patterson-UTI Energy Inc (PTEN). Fundamental analysis takes into consideration market, industry and stock conditions to help determine if the shares are correctly valued. Patterson-UTI Energy Inc currently has a yearly EPS of -1.95. This number is derived from the total net income divided by shares outstanding. In other words, EPS reveals how profitable a company is on a share owner basis.
Turning to Return on Assets or ROA, Patterson-UTI Energy Inc (PTEN) has a current ROA of -7.64. This is a profitability ratio that measures net income generated from total company assets during a given period. This ratio reveals how quick a company can turn it’s assets into profits. In other words, the ratio provides insight into the profitability of a firm’s assets. The ratio is calculated by dividing total net income by the average total assets. A higher ROA compared to peers in the same industry, would suggest that company management is able to effectively generate profits from their assets. Similar to the other ratios, a lower number might raise red flags about management’s ability when compared to other companies in a similar sector.
Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. Patterson-UTI Energy Inc (PTEN) currently has Return on Equity of -13.25. ROE is a ratio that measures profits generated from the investments received from shareholders. In other words, the ratio reveals how effective the firm is at turning shareholder investment into company profits. A company with high ROE typically reflects well on management and how well a company is run at a high level. A firm with a lower ROE might encourage potential investors to dig further to see why profits aren’t being generated from shareholder money.
Another ratio we can look at is the Return on Invested Capital or more commonly referred to as ROIC. Patterson-UTI Energy Inc (PTEN) has a current ROIC of -10.28. ROIC is calculated by dividing Net Income – Dividends by Total Capital Invested.
Similar to ROE, ROIC measures how effectively company management is using invested capital to generate company income. A high ROIC number typically reflects positively on company management while a low number typically reflects the opposite.
Investors have various approaches they can take when deciding what stocks to stuff the portfolio with. Some investors may choose to use fundamental analysis, and some may choose to use technical analysis. Others may employ a combination of the two approaches to make sure no stone is left unturned. Investors looking for bargains in the market may be on the lookout for the stock that offers the best value. This may involve finding stocks that have fallen out of favor with the overall investing community but still have low PE ratios and higher dividend yields. Whatever approach is used, investors may benefit greatly from making sure that all the homework is done, and all of the angles have been examined properly.