Trade-Ideas LLC identified

Ferrellgas Partners

(

FGP

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

  • FGP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.5 million.
  • FGP has traded 191,433 shares today.
  • FGP is trading at 7.21 times the normal volume for the stock at this time of day.
  • FGP is trading at a new low 4.07% 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 FGP:

TheStreet Recommends

Ferrellgas Partners, L.P. distributes and sells propane and related equipment and supplies primarily in the United States. The company transports propane to propane distribution locations, tanks on customers' premises, or to portable propane tanks delivered to retailers. The stock currently has a dividend yield of 11.2%. FGP has a PE ratio of 52. Currently there are no analysts that rate Ferrellgas Partners a buy, 3 analysts rate it a sell, and 2 rate it a hold.

The average volume for Ferrellgas Partners has been 277,900 shares per day over the past 30 days. Ferrellgas has a market cap of $1.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.58 and a short float of 0.9% with 1.24 days to cover. Shares are down 18.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ferrellgas Partners as a

hold

. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • Compared to other companies in the Gas Utilities industry and the overall market, FERRELLGAS PARTNERS -LP's return on equity exceeds that of both the industry average and the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.1%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Gas Utilities industry average, but is less than that of the S&P 500. The net income has decreased by 23.0% when compared to the same quarter one year ago, dropping from -$47.80 million to -$58.78 million.
  • Looking at the price performance of FGP's shares over the past 12 months, there is not much good news to report: the stock is down 27.12%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, FGP is still more expensive than most of the other companies in its industry.
  • The debt-to-equity ratio is very high at 9.59 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.50, which clearly demonstrates the inability to cover short-term cash needs.

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