Perilous Reversal Stock: MPLX (MPLX)

Trade-Ideas LLC identified MPLX (MPLX) as a "perilous reversal" (up big yesterday but down big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

MPLX

(

MPLX

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified MPLX as such a stock due to the following factors:

  • MPLX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.0 million.
  • MPLX has traded 107,908 shares today.
  • MPLX is down 4.5% today.
  • MPLX was up 5.3% yesterday.

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More details on MPLX:

MPLX LP owns, operates, develops, and acquires pipelines and other midstream assets related to the transportation and storage of crude oil, refined product, and other hydrocarbon-based products in the United States. The stock currently has a dividend yield of 4.5%. MPLX has a PE ratio of 23. Currently there are 3 analysts that rate MPLX a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for MPLX has been 387,000 shares per day over the past 30 days. MPLX has a market cap of $3.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.11 and a short float of 14% with 5.97 days to cover. Shares are down 40.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates MPLX as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Currently the debt-to-equity ratio of 1.53 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.
  • Net operating cash flow has declined marginally to $57.00 million or 7.91% when compared to the same quarter last year. Despite a decrease in cash flow MPLX LP is still fairing well by exceeding its industry average cash flow growth rate of -27.14%.
  • MPLX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 36.32%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • MPLX LP has improved earnings per share by 10.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MPLX LP increased its bottom line by earning $1.55 versus $1.03 in the prior year. This year, the market expects an improvement in earnings ($1.96 versus $1.55).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 42.6% when compared to the same quarter one year prior, rising from $29.10 million to $41.50 million.

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