Trade-Ideas LLC identified

Memorial Production Partners

(

MEMP

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

  • MEMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.5 million.
  • MEMP has traded 221,730 shares today.
  • MEMP is trading at 6.00 times the normal volume for the stock at this time of day.
  • MEMP is trading at a new low 9.02% 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 MEMP:

TST Recommends

Memorial Production Partners LP, through its subsidiary, engages in the acquisition, development, exploitation, and production of oil and natural gas properties. The stock currently has a dividend yield of 40.7%. MEMP has a PE ratio of 7. Currently there are 4 analysts that rate Memorial Production Partners a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Memorial Production Partners has been 1.4 million shares per day over the past 30 days. Memorial Production has a market cap of $447.8 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.09 and a short float of 3.2% with 3.93 days to cover. Shares are down 63% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Memorial Production Partners as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, generally high debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • MEMP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 72.72%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • The debt-to-equity ratio is very high at 2.18 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 0.43, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has decreased to $39.76 million or 17.22% when compared to the same quarter last year. Despite a decrease in cash flow of 17.22%, MEMORIAL PRODUCTION PRTRS LP is in line with the industry average cash flow growth rate of -19.46%.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MEMORIAL PRODUCTION PRTRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 2.0% when compared to the same quarter one year ago, dropping from -$111.63 million to -$113.92 million.

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