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 $11.0 million.
  • MEMP has traded 265,451 shares today.
  • MEMP is trading at 2.34 times the normal volume for the stock at this time of day.
  • MEMP is trading at a new low 3.05% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in MEMP with the Ticky from Trade-Ideas. See the FREE profile for MEMP NOW at Trade-Ideas

More details on MEMP:

TheStreet 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 33.3%. MEMP has a PE ratio of 8. Currently there are 5 analysts that rate Memorial Production Partners a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Memorial Production Partners has been 1.1 million shares per day over the past 30 days. Memorial Production has a market cap of $548.3 million and is part of the basic materials sector and energy industry. The stock has a beta of 0.14 and a short float of 3.7% with 1.85 days to cover. Shares are down 50.6% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Memorial Production Partners as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, expanding profit margins and notable return on equity. However, as a counter to these strengths, 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:

  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 34.4%. Since the same quarter one year prior, revenues fell by 31.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • MEMORIAL PRODUCTION PRTRS LP has improved earnings per share by 26.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, MEMORIAL PRODUCTION PRTRS LP increased its bottom line by earning $0.85 versus $0.11 in the prior year. For the next year, the market is expecting a contraction of 312.4% in earnings (-$1.81 versus $0.85).
  • 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 71.98%, 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.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.