With Profitability At The Forefront, Is This Stock a Top Pick: Bonanza Creek Energy Inc. (NYSE:BCEI)

Any investors would pay particular attention to the profitability of a company before considering taking a position.  Here we’ll take a quick look at shares of Bonanza Creek Energy Inc. (NYSE:BCEI) and the company’s ability to generate profit.  The firm currently has a Return on Equity -489.00% which is derived from comparing 12-months net income to shareholder equity.  So even though the company is generating profits, where can the stock go from here?  Sell-side analysts covering the shares are projecting a one year price target of $1.13 on the stock.  When comparing this to a recent price of $1.99, the potential upside should be noted.  Taking analyst recommendations into consideration results in a Buy/Sell consensus recommendation of 3.30.  This is according to all of the analysts polled by First Call.  

What makes a stock profitable?  Let’s look at a few factors.

Rising EPS (Earnings Per Share)

Businesses must be able to have competitive advantages and must produce value to consumers in the form of desirable goods and services.  When a business has a strong brand, they can afford to raise prices and also have a differentiated product that is more desirable compared to their competition.  A business that is able to grow earnings per share can afford to pay a rising dividend. Bonanza Creek Energy Inc. (NYSE:BCEI)’s trailing 12-months EPS is -14.37.

Historical Growth

Bonanza Creek Energy Inc. (NYSE:BCEI)’s performance this year to date is 95.10%.  The stock has performed 14.37% over the last seven days, 19.88% over the last thirty, and 89.52% over the last three months.  Over the last six months, Bonanza Creek Energy Inc.’s stock has been 82.57% and -40.95% for the year.

RSI and Recommendations

Bonanza Creek Energy Inc.’s RSI is 61.19.  Based on the stock’s volatility for the week, which is a statistical measure of the dispersion of returns for a given stock and represents average daily high/low percentage range of 22.39% and month of 26.49%.  

There are a number of sell-side analysts who have recently weighed in on the firm.  As stated earlier, the consensus target price is $1.13 with a mean recommendation of 3.30 (1-5 scale). 

Nothing contained in this publication is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

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