Trade-Ideas LLC identified

RSP Permian

(

RSPP

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

  • RSPP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.9 million.
  • RSPP has traded 163,930 shares today.
  • RSPP is trading at 2.39 times the normal volume for the stock at this time of day.
  • RSPP is trading at a new high 8.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 RSPP:

RSP Permian, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. RSPP has a PE ratio of 15. Currently there are 15 analysts that rate RSP Permian a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for RSP Permian has been 1.8 million shares per day over the past 30 days. RSP Permian has a market cap of $2.1 billion and is part of the basic materials sector and energy industry. Shares are down 13.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates RSP Permian as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, unimpressive growth in net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • Net operating cash flow has decreased to $35.45 million or 41.10% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.27%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 76.74% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 72.2% when compared to the same quarter one year ago, falling from $32.30 million to $8.98 million.
  • RSP PERMIAN INC 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, RSP PERMIAN INC swung to a loss, reporting -$0.07 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($0.51 versus -$0.07).
  • 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, RSP PERMIAN INC's return on equity is below that of both the industry average and the S&P 500.

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