Marathon Petroleum (MPC) Highlighted As Storm The Castle Stock

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 Marathon Petroleum ( MPC) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Marathon Petroleum as such a stock due to the following factors:

  • MPC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $236.0 million.
  • MPC has traded 2.8 million shares today.
  • MPC is trading at 2.23 times the normal volume for the stock at this time of day.
  • MPC crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 MPC:

Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, transporting, and marketing petroleum products primarily in the United States. It operates through Refining & Marketing, Speedway, and Pipeline Transportation segments. The stock currently has a dividend yield of 2.3%. MPC has a PE ratio of 10.6. Currently there are 5 analysts that rate Marathon Petroleum a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Marathon Petroleum has been 3.3 million shares per day over the past 30 days. Marathon has a market cap of $21.7 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.62 and a short float of 1.5% with 1.21 days to cover. Shares are up 17.5% year to date as of the close of trading on Tuesday.

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 Marathon Petroleum as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 25.7%. 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.
  • MPC's share price has surged by 26.99% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MPC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MARATHON PETROLEUM CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, MARATHON PETROLEUM CORP increased its bottom line by earning $9.91 versus $5.19 in the prior year. For the next year, the market is expecting a contraction of 45.5% in earnings ($5.41 versus $9.91).
  • 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 86.3% when compared to the same quarter one year ago, falling from $1,224.00 million to $168.00 million.
  • The gross profit margin for MARATHON PETROLEUM CORP is currently extremely low, coming in at 3.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.68% trails that of the industry average.

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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