Trade-Ideas LLC identified

Western Gas Partners

(

WES

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Western Gas Partners as such a stock due to the following factors:

  • WES has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.0 million.
  • WES has traded 359,359 shares today.
  • WES traded in a range 240.8% of the normal price range with a price range of $4.42.
  • WES traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on WES:

Western Gas Partners, LP owns, operates, acquires, and develops midstream energy assets in the Rocky Mountains, the Mid-Continent, North-central Pennsylvania, and Texas. The stock currently has a dividend yield of 6.5%. WES has a PE ratio of 27. Currently there are 10 analysts that rate Western Gas Partners a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Western Gas Partners has been 378,100 shares per day over the past 30 days. Western Gas has a market cap of $6.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.59 and a short float of 3.8% with 5.92 days to cover. Shares are down 39.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Western Gas Partners as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in net income. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 34.6%. Since the same quarter one year prior, revenues rose by 16.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.23, which illustrates the ability to avoid short-term cash problems.
  • 47.34% is the gross profit margin for WESTERN GAS PARTNERS LP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.46% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $145.43 million or 3.76% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.71%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 11.4% when compared to the same quarter one year prior, going from $99.17 million to $110.52 million.

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