Trade-Ideas LLC identified

Alon USA Energy

(

ALJ

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

  • ALJ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.2 million.
  • ALJ has traded 111,583 shares today.
  • ALJ is trading at 2.64 times the normal volume for the stock at this time of day.
  • ALJ is trading at a new low 4.08% 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 ALJ:

Alon USA Energy, Inc. refines and markets petroleum products, primarily in the South Central, Southwestern, and Western regions of the United States. It operates in three segments: Refining and Marketing, Asphalt, and Retail. The stock currently has a dividend yield of 9.1%. Currently there are no analysts that rate Alon USA Energy a buy, 2 analysts rate it a sell, and 5 rate it a hold.

The average volume for Alon USA Energy has been 1.3 million shares per day over the past 30 days. Alon USA Energy has a market cap of $470.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 0.84 and a short float of 23.2% with 6.16 days to cover. Shares are down 57.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Alon USA Energy as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, disappointing return on equity and generally disappointing historical performance in the stock itself.

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 when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 231.9% when compared to the same quarter one year ago, falling from $26.94 million to -$35.54 million.
  • The gross profit margin for ALON USA ENERGY INC is currently extremely low, coming in at 5.56%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.27% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$29.35 million or 52.70% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ALON USA ENERGY INC has marginally lower results.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ALON USA ENERGY INC's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 65.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 234.21% 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.

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