Downgrade Alert - HEC

Here in Penny Stock Pick we rate penny stock by news, market potential, insider, financial statement and technical chart. The average rating of the stock is then used to determine how we would recommend the stock from Strong Buy to Strong Sell.

The stock which is showing weakness is is Harken Energy Corp. (HEC), the Southlake, Texas based oil and gas company in the guylf coast regions. There hasn't been any significant news recently, however the technicals and financials are showing warning signs that the stock could be heading lower.

Technical
The technical chart now shows bearish sign as the 50 day moving average has crossed below 200 day moving average since mid July to form Death Cross - a strong sell signal. In addition other technical indicators such as MACD and KD also show weak signal as MACD is below 0 and K line is dropping below D line.

Insider
The director and CEO has purchased 70,000 shares this year. However the institutions are quite negative about the stock and actually sold 3.3 million shares and have reduced 69.7% of their holdings in the latest quarter.

Financial
The income statement shows negative sign as the revenue has declined almost half from $9.88 million in March down to $5.69 million in June. Moreover the company has been getting negative loss for the first two quarters of this year comparing with net income before.

Penny Stock Score (1~5) 5 is highest
1. Market Potential(Oil): 3.5
2. Technical: 1
3. Insider: 2.5
4. Financial: 1.5
Recommendation(2.1): Sell