Trade-Ideas LLC identified

Atlas Resource Partners

(

ARP

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

  • ARP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.9 million.
  • ARP has traded 430,723 shares today.
  • ARP is trading at 5.89 times the normal volume for the stock at this time of day.
  • ARP is trading at a new high 12.09% 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 ARP:

Atlas Resource Partners, L.P. operates as an independent developer and producer of natural gas, crude oil, and natural gas liquids in the United States. The company operates in three segments: Gas and Oil Production, Well Construction and Completion, and Other Partnership Management. The stock currently has a dividend yield of 40.6%. Currently there are 2 analysts that rate Atlas Resource Partners a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Atlas Resource Partners has been 1.1 million shares per day over the past 30 days. Atlas Resource has a market cap of $304.7 million and is part of the basic materials sector and energy industry. The stock has a beta of 0.72 and a short float of 4.9% with 2.46 days to cover. Shares are down 68.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Atlas Resource Partners as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins 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 137.8% when compared to the same quarter one year ago, falling from -$20.52 million to -$48.81 million.
  • Currently the debt-to-equity ratio of 1.61 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, ARP has a quick ratio of 0.53, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ATLAS RESOURCE PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ATLAS RESOURCE PARTNERS LP is currently lower than what is desirable, coming in at 34.93%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -50.79% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 85.68%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 48.64% 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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