Trade-Ideas: Plains GP Holdings (PAGP) Is Today's "Barbarian At The Gate" Stock

Trade-Ideas LLC identified Plains GP Holdings (PAGP) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Plains GP Holdings

(

PAGP

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Plains GP Holdings as such a stock due to the following factors:

  • PAGP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $52.6 million.
  • PAGP has traded 5.3 million shares today.
  • PAGP traded in a range 213.8% of the normal price range with a price range of $1.53.
  • PAGP traded above its daily resistance level (quality: 25 days, meaning that the stock is crossing a resistance level set by the last 25 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in PAGP with the Ticky from Trade-Ideas. See the FREE profile for PAGP NOW at Trade-Ideas

More details on PAGP:

Plains GP Holdings, L.P., through its interest in Plains AAP, L.P., owns and operates midstream energy infrastructure and provides logistics services for crude oil, natural gas liquids, natural gas, and refined products in the United States and Canada. The stock currently has a dividend yield of 7.8%. PAGP has a PE ratio of 21. Currently there are 9 analysts that rate Plains GP Holdings a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Plains GP Holdings has been 2.9 million shares per day over the past 30 days. Plains GP has a market cap of $2.7 billion and is part of the basic materials sector and energy industry. Shares are down 54.4% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Plains GP Holdings as a

sell

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

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 6.24 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, PAGP has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • PAGP'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 57.04%, 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.
  • The gross profit margin for PLAINS GP HOLDINGS LP is currently extremely low, coming in at 9.04%. Regardless of PAGP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PAGP's net profit margin of 0.57% compares favorably to the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PLAINS GP HOLDINGS LP's return on equity is below that of both the industry average and the S&P 500.
  • Along with the very weak revenue results, PAGP underperformed when compared to the industry average of 36.7%. Since the same quarter one year prior, revenues plummeted by 50.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Loading ...