Trade-Ideas LLC identified

Valero Energy

(

VLO

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

  • VLO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $315.3 million.
  • VLO has traded 761,070 shares today.
  • VLO is trading at 2.67 times the normal volume for the stock at this time of day.
  • VLO is trading at a new low 3.00% 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 VLO:

Valero Energy Corporation operates as an independent petroleum refining and marketing company in the United States, Canada, the Caribbean, the United Kingdom, and Ireland. It operates through two segments, Refining and Ethanol. The stock currently has a dividend yield of 4.6%. VLO has a PE ratio of 7. Currently there are 10 analysts that rate Valero Energy a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Valero Energy has been 5.7 million shares per day over the past 30 days. Valero Energy has a market cap of $24.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.12 and a short float of 2.5% with 2.25 days to cover. Shares are down 26.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Valero Energy as a

buy

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.25, which illustrates the ability to avoid short-term cash problems.
  • VLO, with its decline in revenue, slightly underperformed the industry average of 24.6%. Since the same quarter one year prior, revenues fell by 28.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 48.6% when compared to the same quarter one year ago, falling from $964.00 million to $495.00 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, VALERO ENERGY CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.

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