Perilous Reversal Stock: Hi-Crush Partners (HCLP)

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 Hi-Crush Partners ( HCLP) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Hi-Crush Partners as such a stock due to the following factors:

  • HCLP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.1 million.
  • HCLP has traded 352,583 shares today.
  • HCLP is down 3.4% today.
  • HCLP was up 7.1% yesterday.

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More details on HCLP:

Hi-Crush Partners LP operates as a producer and supplier of monocrystalline sand. Monocrystalline sand is a mineral that is used as a proppant to enhance the recovery rates of hydrocarbons from oil and natural gas wells. The stock currently has a dividend yield of 5.5%. HCLP has a PE ratio of 16.5. Currently there are 9 analysts that rate Hi-Crush Partners a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Hi-Crush Partners has been 713,000 shares per day over the past 30 days. Hi-Crush has a market cap of $1.1 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 2.30 and a short float of 3.4% with 1.21 days to cover. Shares are up 29.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hi-Crush Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • HCLP's very impressive revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues leaped by 92.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 44.76% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Net operating cash flow has increased to $24.16 million or 40.68% when compared to the same quarter last year. In addition, HI-CRUSH PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -55.48%.
  • The debt-to-equity ratio of 1.22 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, HCLP has managed to keep a strong quick ratio of 2.04, which demonstrates the ability to cover short-term cash needs.

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