Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Ecopetrol

(

EC

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

  • EC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.6 million.
  • EC has traded 126,517 shares today.
  • EC is trading at 3.02 times the normal volume for the stock at this time of day.
  • EC is trading at a new high 4.02% 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 EC:

Ecopetrol S.A., an integrated oil company, is engaged in the exploration, development, and production of crude oil and natural gas primarily in Colombia, Peru, Brazil, and the United States Gulf Coast. The stock currently has a dividend yield of 14.3%. EC has a PE ratio of 1566.0. Currently there is 1 analyst that rates Ecopetrol a buy, 3 analysts rate it a sell, and 1 rates it a hold.

The average volume for Ecopetrol has been 1.0 million shares per day over the past 30 days. Ecopetrol has a market cap of $33.5 billion and is part of the basic materials sector and energy industry. Shares are up 1.6% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ecopetrol as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems.
  • 41.90% is the gross profit margin for ECOPETROL SA which we consider to be strong. Regardless of EC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EC's net profit margin of 12.17% compares favorably to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 50.5% when compared to the same quarter one year ago, falling from $2,059.01 million to $1,019.03 million.
  • Net operating cash flow has decreased to $2,807.39 million or 26.47% 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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