Today's Water-Logged And Getting Wetter Stock: Western Refining (WNR)

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 Western Refining ( WNR) 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 Western Refining as such a stock due to the following factors:

  • WNR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $59.0 million.
  • WNR has traded 604,482 shares today.
  • WNR traded in a range 216.7% of the normal price range with a price range of $2.24.
  • WNR traded below its daily resistance level (quality: 33 days, meaning that the stock is crossing a resistance level set by the last 33 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 WNR:

Western Refining, Inc. operates as an independent crude oil refiner and marketer of refined products. The stock currently has a dividend yield of 2.2%. WNR has a PE ratio of 16.1. Currently there are 2 analysts that rate Western Refining a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Western Refining has been 1.5 million shares per day over the past 30 days. Western Refining has a market cap of $4.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.27 and a short float of 25.8% with 4.91 days to cover. Shares are up 9% 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 Western Refining as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, attractive valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • WNR's very impressive revenue growth greatly exceeded the industry average of 3.5%. Since the same quarter one year prior, revenues leaped by 79.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 56.76% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WNR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • WESTERN REFINING INC has improved earnings per share by 6.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WESTERN REFINING INC reported lower earnings of $2.71 versus $3.58 in the prior year. This year, the market expects an improvement in earnings ($3.58 versus $2.71).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 5.0% when compared to the same quarter one year prior, going from $149.26 million to $156.70 million.

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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