Water-Logged And Getting Wetter Stock Of The Day: Kinder Morgan Energy Partners (KMP)

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 Kinder Morgan Energy Partners ( KMP) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Kinder Morgan Energy Partners as such a stock due to the following factors:

  • KMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $90.4 million.
  • KMP has traded 650,660 shares today.
  • KMP traded in a range 207.7% of the normal price range with a price range of $1.61.
  • KMP traded below its daily resistance level (quality: 11 days, meaning that the stock is crossing a resistance level set by the last 11 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on KMP:

Kinder Morgan Energy Partners, L.P. operates as a pipeline transportation and energy storage company in North America. The stock currently has a dividend yield of 6.6%. KMP has a PE ratio of 21.9. Currently there are 6 analysts that rate Kinder Morgan Energy Partners a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Kinder Morgan Energy Partners has been 1.0 million shares per day over the past 30 days. Kinder Morgan Energy has a market cap of $25.6 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.58 and a short float of 1.9% with 4.03 days to cover. Shares are up 2.1% year-to-date as of the close of trading on Friday.

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 Kinder Morgan Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these 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 5.7%. Since the same quarter one year prior, revenues rose by 35.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • KINDER MORGAN ENERGY -LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KINDER MORGAN ENERGY -LP turned its bottom line around by earning $1.64 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($2.77 versus $1.64).
  • 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 70.1% when compared to the same quarter one year prior, rising from $405.00 million to $689.00 million.
  • Net operating cash flow has increased to $956.00 million or 18.02% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.58%.
  • 39.07% is the gross profit margin for KINDER MORGAN ENERGY -LP which we consider to be strong. Regardless of KMP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KMP's net profit margin of 20.37% significantly outperformed against the industry.

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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