Memorial Resource Development (MRD) Weak On High Volume
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Memorial Resource Development as such a stock due to the following factors:
- MRD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.2 million.
- MRD has traded 127,964 shares today.
- MRD is trading at 2.73 times the normal volume for the stock at this time of day.
- MRD is trading at a new low 4.04% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on MRD:
Memorial Resource Development Corp., an independent natural gas and oil company, engages in the acquisition, exploitation, and development of natural gas, natural gas liquids, and oil properties primarily in North Louisiana. MRD has a PE ratio of 58. Currently there are 7 analysts that rate Memorial Resource Development a buy, no analysts rate it a sell, and 9 rate it a hold.
The average volume for Memorial Resource Development has been 3.3 million shares per day over the past 30 days. Memorial Resource Development has a market cap of $3.3 billion and is part of the basic materials sector and energy industry. Shares are down 0.4% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Memorial Resource Development as a
. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, generally disappointing historical performance in the stock itself, weak operating cash flow and poor profit margins.
Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 88.3% when compared to the same quarter one year ago, falling from $48.75 million to $5.68 million.
- The debt-to-equity ratio is very high at 3.79 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.50, which clearly demonstrates the inability to cover short-term cash needs.
- Net operating cash flow has decreased to $133.25 million or 22.44% when compared to the same quarter last year. Despite a decrease in cash flow MEMORIAL RESOURCE DEV CORP is still fairing well by exceeding its industry average cash flow growth rate of -49.64%.
- The share price of MEMORIAL RESOURCE DEV CORP has not done very well: it is down 15.19% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for MEMORIAL RESOURCE DEV CORP is currently lower than what is desirable, coming in at 27.46%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, MRD's net profit margin of 3.99% compares favorably to the industry average.
- You can view the full Memorial Resource Development Ratings Report.
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