Strong On High Volume: Plains All American Pipeline (PAA)
Trade-Ideas LLC identified
(
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Plains All American Pipeline as such a stock due to the following factors:
- PAA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.9 million.
- PAA has traded 463,260 shares today.
- PAA is trading at 8.51 times the normal volume for the stock at this time of day.
- PAA is trading at a new high 8.02% above yesterday's close.
'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 PAA:
Plains All American Pipeline, L.P., through with its subsidiaries, engages in the transportation, storage, terminalling, and marketing of crude oil, natural gas liquids (NGL), natural gas, and refined products in the United States and Canada. The stock currently has a dividend yield of 10.2%. PAA has a PE ratio of 56. Currently there are 4 analysts that rate Plains All American Pipeline a buy, 1 analyst rates it a sell, and 15 rate it a hold.
The average volume for Plains All American Pipeline has been 2.8 million shares per day over the past 30 days. Plains All American Pipeline has a market cap of $10.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.88 and a short float of 2.1% with 3.71 days to cover. Shares are up 16% year-to-date as of the close of trading on Monday.
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Analysis:
rates Plains All American Pipeline as a
. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including generally higher debt management risk, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- PAA, with its decline in revenue, slightly underperformed the industry average of 24.0%. Since the same quarter one year prior, revenues fell by 30.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.41%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 80.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The debt-to-equity ratio of 1.06 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, PAA has a quick ratio of 0.52, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full Plains All American Pipeline Ratings Report.
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