Semgroup (SEMG): Today's Weak On High Volume Stock

Trade-Ideas LLC identified Semgroup (SEMG) as a weak on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Semgroup

(

SEMG

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Semgroup as such a stock due to the following factors:

  • SEMG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.1 million.
  • SEMG has traded 83,097 shares today.
  • SEMG is trading at 9.03 times the normal volume for the stock at this time of day.
  • SEMG is trading at a new low 9.00% 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 SEMG:

SemGroup Corporation, together with its subsidiaries, provides gathering, transportation, storage, distribution, marketing, and other midstream services. It operates through six segments: Crude, SemStream, SemLogistics, SemCAMS, SemMexico, and SemGas. The stock currently has a dividend yield of 3.7%. SEMG has a PE ratio of 34. Currently there are 4 analysts that rate Semgroup a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Semgroup has been 498,300 shares per day over the past 30 days. Semgroup has a market cap of $2.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.90 and a short float of 4.7% with 4.48 days to cover. Shares are down 33.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Semgroup as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • 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 232.3% when compared to the same quarter one year prior, rising from -$17.61 million to $23.30 million.
  • SEMGROUP CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SEMGROUP CORP reported lower earnings of $0.64 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($1.49 versus $0.64).
  • The gross profit margin for SEMGROUP CORP is rather low; currently it is at 19.16%. Regardless of SEMG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SEMG's net profit margin of 6.17% compares favorably to the industry average.
  • SEMG'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 40.45%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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