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 Miller Energy Resources ( MILL) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Miller Energy Resources as such a stock due to the following factors:

  • MILL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • MILL has traded 131,382 shares today.
  • MILL is trading at 3.64 times the normal volume for the stock at this time of day.
  • MILL is trading at a new high 17.24% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 MILL:

Miller Energy Resources, Inc., an independent exploration and production company, explores for, develops, and operates oil and gas wells in south-central Alaska and in the Appalachian region of east Tennessee. Currently there are 4 analysts that rate Miller Energy Resources a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Miller Energy Resources has been 652,300 shares per day over the past 30 days. Miller Energy has a market cap of $56.5 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.80 and a short float of 18.3% with 3.47 days to cover. Shares are down 80.8% 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 Miller Energy Resources as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 71.1% when compared to the same quarter one year ago, falling from -$6.93 million to -$11.85 million.
  • 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, MILLER ENERGY RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 80.17%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 54.54% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • MILLER ENERGY RESOURCES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MILLER ENERGY RESOURCES INC reported poor results of -$0.94 versus -$0.60 in the prior year. This year, the market expects an improvement in earnings (-$0.87 versus -$0.94).
  • The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.86 is somewhat weak and could be cause for future problems.

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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