Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

EV Energy Partners

(

EVEP

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

  • EVEP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.0 million.
  • EVEP has traded 100,030 shares today.
  • EVEP is trading at 4.55 times the normal volume for the stock at this time of day.
  • EVEP is trading at a new low 5.10% 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 EVEP:

TST Recommends

EV Energy Partners, L.P. engages in the acquisition, development, and production of oil and natural gas properties in the United States. The company operates in two segments, Exploration and Production, and Midstream. The stock currently has a dividend yield of 18.2%. EVEP has a PE ratio of 8. Currently there are 4 analysts that rate EV Energy Partners a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for EV Energy Partners has been 372,300 shares per day over the past 30 days. EV Energy has a market cap of $537.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.13 and a short float of 3% with 3.16 days to cover. Shares are down 46.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates EV Energy Partners as a

sell

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

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 886.2% when compared to the same quarter one year ago, falling from -$6.25 million to -$61.67 million.
  • 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. Along with the unfavorable debt-to-equity ratio, EVEP maintains a poor quick ratio of 0.77, which illustrates the inability to avoid short-term cash problems.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 71.21%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 694.11% 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.
  • EV ENERGY PARTNERS LP 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, EV ENERGY PARTNERS LP turned its bottom line around by earning $2.52 versus -$1.69 in the prior year. For the next year, the market is expecting a contraction of 119.0% in earnings (-$0.48 versus $2.52).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EV ENERGY PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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