Trade-Ideas: Crestwood Midstream Partners (CMLP) Is Today's Weak On High Relative Volume 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 Crestwood Midstream Partners ( CMLP) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Crestwood Midstream Partners as such a stock due to the following factors:

  • CMLP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.9 million.
  • CMLP has traded 61,096 shares today.
  • CMLP is trading at 2.48 times the normal volume for the stock at this time of day.
  • CMLP is trading at a new low 3.02% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. 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 (or avoid losses by trimming weak positions). 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 CMLP:

Crestwood Midstream Partners LP is engaged in the gathering, processing, treating, compression, storage, and transportation of natural gas; storage and transportation of natural gas liquids (NGLs); and gathering, storage, and terminalling of crude oil in the United States. The stock currently has a dividend yield of 7.5%. Currently there are 9 analysts that rate Crestwood Midstream Partners a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Crestwood Midstream Partners has been 664,400 shares per day over the past 30 days. Crestwood Midstream has a market cap of $4.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.67 and a short float of 2.9% with 3.74 days to cover. Shares are down 13.5% 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 Crestwood Midstream Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • CMLP's very impressive revenue growth greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues leaped by 427.1%. 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.
  • 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 73.2% when compared to the same quarter one year prior, rising from $9.70 million to $16.80 million.
  • The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CRESTWOOD MIDSTREAM PTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CRESTWOOD MIDSTREAM PTNRS LP is currently extremely low, coming in at 14.23%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 2.27% 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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