Trade-Ideas LLC identified

Magellan Midstream Partners

(

MMP

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

  • MMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $124.3 million.
  • MMP has traded 154,149 shares today.
  • MMP is trading at 3.26 times the normal volume for the stock at this time of day.
  • MMP 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 MMP:

Magellan Midstream Partners, L.P. engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. It operates in three segments: Refined Products, Crude Oil, and Marine Storage. The stock currently has a dividend yield of 4.5%. MMP has a PE ratio of 19. Currently there are 10 analysts that rate Magellan Midstream Partners a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Magellan Midstream Partners has been 1.2 million shares per day over the past 30 days. Magellan Midstream has a market cap of $15.5 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.01 and a short float of 2.3% with 2.82 days to cover. Shares are down 17.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Magellan Midstream Partners as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and increase in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 36.8%. Since the same quarter one year prior, revenues rose by 10.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MAGELLAN MIDSTREAM PRTNRS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for MAGELLAN MIDSTREAM PRTNRS LP is rather high; currently it is at 61.29%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.47% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $309.29 million or 31.07% when compared to the same quarter last year. In addition, MAGELLAN MIDSTREAM PRTNRS LP has also vastly surpassed the industry average cash flow growth rate of -26.85%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 26.4% when compared to the same quarter one year prior, rising from $198.62 million to $250.97 million.

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