Trade-Ideas LLC identified

Ecopetrol

(

EC

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

  • EC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.4 million.
  • EC has traded 180,563 shares today.
  • EC is trading at 5.47 times the normal volume for the stock at this time of day.
  • EC is trading at a new low 3.02% 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 EC:

Ecopetrol S.A., an integrated oil company, engages in the exploration, development, and production of crude oil and natural gas primarily in Colombia, Peru, Brazil, Angola, and the United States Gulf Coast. The stock currently has a dividend yield of 12.4%. EC has a PE ratio of 1566. Currently there are no analysts that rate Ecopetrol a buy, 2 analysts rate it a sell, and 1 rates it a hold.

The average volume for Ecopetrol has been 917,600 shares per day over the past 30 days. Ecopetrol has a market cap of $17.4 billion and is part of the basic materials sector and energy industry. Shares are down 51.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ecopetrol as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • ECOPETROL SA has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ECOPETROL SA reported lower earnings of $1.55 versus $3.31 in the prior year. For the next year, the market is expecting a contraction of 51.6% in earnings ($0.75 versus $1.55).
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 89.2% when compared to the same quarter one year ago, falling from $1,019.03 million to $110.39 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 64.48%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 90.00% 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.
  • EC, with its very weak revenue results, has greatly underperformed against the industry average of 36.7%. Since the same quarter one year prior, revenues plummeted by 68.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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