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.

Trade-Ideas LLC identified

Rentech Nitrogen Partners

(

RNF

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

  • RNF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.4 million.
  • RNF has traded 355,703 shares today.
  • RNF is trading at 75.90 times the normal volume for the stock at this time of day.
  • RNF is trading at a new high 6.04% 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 RNF:

Rentech Nitrogen Partners, L.P. produces and sells nitrogen fertilizer products in the United States and internationally. It operates through two segments, East Dubuque and Pasadena. The stock currently has a dividend yield of 14%. RNF has a PE ratio of 86. Currently there are 2 analysts that rate Rentech Nitrogen Partners a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Rentech Nitrogen Partners has been 96,200 shares per day over the past 30 days. Rentech Nitrogen has a market cap of $400.8 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.61 and a short float of 3.1% with 2.00 days to cover. Shares are up 26.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Rentech Nitrogen Partners as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and compelling growth in net income. 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:

  • The revenue growth greatly exceeded the industry average of 10.9%. Since the same quarter one year prior, revenues rose by 22.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Chemicals industry and the overall market, RENTECH NITROGEN PARTNERS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • RENTECH NITROGEN PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, RENTECH NITROGEN PARTNERS LP swung to a loss, reporting -$0.03 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus -$0.03).
  • RNF'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 34.45%, 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 52.67 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, RNF has a quick ratio of 0.61, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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