Toreador Resources Corp. (TRGL) is an oil & gas E&P based in France. I shorted Toreador Resources as part of a market neutral trade (paired with a different long position) last July, when it was trading below $6 per share. I got stopped out for a loss a week later, when the stock was just above $7. As you can see from the chart below, Toreador Resources went on quite a run from there, though it has since pulled back from its high earlier this year.
As of its closing price Wednesday, Toreador Resources was trading at 12.29x its trailing 12-month sales.
Short Screen shows an Altman Z"-Score of 1.03 for Toreador Resources (recall that Z"-Scores below 1.1 indicate financial distress, according to the model).
Audit Integrity rates Toreador Resources as having "aggressive" Accounting & Governance Risk (AGR®), placing it in the 15th percentile (i.e., it has higher accounting & governance risk than 85% of the 8,000 companies Audit Integrity rates).
I plan on using a trailing stop here, in the event Toreador Resources shares again buck the company's seemingly weak fundamentals and go on another run.
Imperial Oil, Ltd (IMO), an Exxon Mobil subsidiary in Canada, isn't a pure-play E&P: Like its parent company, in addition to its exploration & production ("upstream") operations, it has downstream and chemical operations as well. Still, as with its parent, the bulk of IMO's earnings come from its upstream operations: 71% of IMO's earnings came from upstream operations in 2010.
As of its closing price Wednesday, IMO was trading at 1.8x its trailing 12-month sales.
Short Screen shows an Altman Z-Score of 5.24 for IMO (recall that Z-Scores of 3 and above indicate financial strength). A quick note about why Short Screen shows a Z-Score for IMO, and not a Z"-Score, as it does for Toreador Resources: Short Screen uses Standard Industrial Classification (SIC) codes to categorize a company as manufacturing or non-manufacturing. Companies in SIC codes 2000-3990 are considered manufacturing companies. Although only a minority of IMOs' earnings come from its refining business (part of its "downstream" operations), the company's SIC code is 2911 (Petroleum Refining).
Audit Integrity rates IMO as having "average" Accounting & Governance Risk (AGR®), placing it in the 40th percentile (i.e., it has higher accounting & governance risk than 60% of the 8,000 companies Audit Integrity rates).
I plan on using a trailing stop on IMO as well.