Trade-Ideas LLC identified

Plains All American Pipeline

(

PAA

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Plains All American Pipeline as such a stock due to the following factors:

  • PAA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $98.3 million.
  • PAA has traded 4.5 million shares today.
  • PAA traded in a range 270.6% of the normal price range with a price range of $3.38.
  • PAA traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on PAA:

Plains All American Pipeline, L.P., through with its subsidiaries, engages in the transportation, storage, terminalling, and marketing of crude oil, natural gas liquids (NGL), natural gas, and refined products in the United States and Canada. The stock currently has a dividend yield of 10%. PAA has a PE ratio of 19. Currently there are 14 analysts that rate Plains All American Pipeline a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Plains All American Pipeline has been 2.3 million shares per day over the past 30 days. Plains All American Pipeline has a market cap of $11.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.99 and a short float of 1.8% with 2.02 days to cover. Shares are down 47.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Plains All American Pipeline as a

hold

. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and generally higher debt management risk.

Highlights from the ratings report include:

  • PAA, with its decline in revenue, slightly underperformed the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 40.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for PLAINS ALL AMER PIPELNE -LP is currently extremely low, coming in at 5.97%. Regardless of PAA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.86% trails the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.99%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 113.33% compared to 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, PAA is still more expensive than most of the other companies in its industry.
  • PLAINS ALL AMER PIPELNE -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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, PLAINS ALL AMER PIPELNE -LP reported lower earnings of $2.37 versus $2.80 in the prior year. For the next year, the market is expecting a contraction of 24.9% in earnings ($1.78 versus $2.37).

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