Strong And Under The Radar Today: Tallgrass Energy Partners (TEP)

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 Tallgrass Energy Partners ( TEP) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Tallgrass Energy Partners as such a stock due to the following factors:

  • TEP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.1 million.
  • TEP is making at least a new 3-day high.
  • TEP has a PE ratio of 34.6.
  • TEP is mentioned 0.74 times per day on StockTwits.
  • TEP has not yet been mentioned on StockTwits today.
  • TEP is currently in the upper 20% of its 1-year range.
  • TEP is in the upper 35% of its 20-day range.
  • TEP is in the upper 45% of its 5-day range.
  • TEP is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on TEP:

Tallgrass Energy Partners, LP acquires, owns, develops, and operates various midstream energy assets in North America. The company operates in two segments, Gas Transportation and Storage, and Processing. The stock currently has a dividend yield of 3.9%. TEP has a PE ratio of 34.6. Currently there are 5 analysts that rate Tallgrass Energy Partners a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Tallgrass Energy Partners has been 160,600 shares per day over the past 30 days. Tallgrass Energy has a market cap of $1.4 billion and is part of the basic materials sector and energy industry. Shares are up 64% 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 Tallgrass Energy Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has decreased to $12.29 million or 42.27% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The gross profit margin for TALLGRASS ENERGY PRT LP is rather low; currently it is at 24.07%. Regardless of TEP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, TEP's net profit margin of 12.72% compares favorably to the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TALLGRASS ENERGY PRT LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The current debt-to-equity ratio, 0.55, 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 1.04, which illustrates the ability to avoid short-term cash problems.
  • This stock has increased by 76.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Despite the fact that the stock's value has already enjoyed nice gains in the past year, we feel that the risks surrounding an investment in this stock outweigh any potential future returns.

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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