Today's Weak On High Volume Stock: EP Energy (EPE) - TheStreet

Trade-Ideas LLC identified

EP Energy

(

EPE

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

  • EPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.6 million.
  • EPE has traded 335,495 shares today.
  • EPE is trading at 4.25 times the normal volume for the stock at this time of day.
  • EPE is trading at a new low 4.05% 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.

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More details on EPE:

EP Energy Corporation, an independent exploration and production company, acquires and develops unconventional onshore oil and natural gas properties in the United States. EPE has a PE ratio of 7. Currently there are 4 analysts that rate EP Energy a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for EP Energy has been 3.0 million shares per day over the past 30 days. EP Energy has a market cap of $1.4 billion and is part of the basic materials sector and energy industry. Shares are down 44.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates EP Energy as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The debt-to-equity ratio of 1.13 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.37, which clearly demonstrates the inability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 61.44%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 42.40% 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.
  • EP ENERGY CORP's earnings per share declined by 42.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, EP ENERGY CORP turned its bottom line around by earning $2.97 versus -$0.42 in the prior year. For the next year, the market is expecting a contraction of 73.6% in earnings ($0.79 versus $2.97).
  • The change in net income from the same quarter one year ago has significantly 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 42.3% when compared to the same quarter one year ago, falling from $305.00 million to $176.00 million.
  • Despite the weak revenue results, EPE has outperformed against the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 21.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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