Alon USA Partners (ALDW) Weak On High Volume Today

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 Alon USA Partners ( ALDW) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Alon USA Partners as such a stock due to the following factors:

  • ALDW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.6 million.
  • ALDW has traded 83,461 shares today.
  • ALDW is trading at 6.14 times the normal volume for the stock at this time of day.
  • ALDW is trading at a new low 4.09% 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 ALDW:

Alon USA Partners, LP refines and markets petroleum products primarily in the South Central and Southwestern regions of the United States. The company owns and operates a crude oil refinery in Big Spring, Texas with crude oil throughput capacity of 73,000 barrels per day. The stock currently has a dividend yield of 27.6%. ALDW has a PE ratio of 6.6. Currently there are no analysts that rate Alon USA Partners a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Alon USA Partners has been 207,400 shares per day over the past 30 days. Alon USA has a market cap of $925.7 million and is part of the basic materials sector and energy industry. The stock has a beta of 0.88 and a short float of 2.4% with 1.00 days to cover. Shares are down 10% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alon USA Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins.

Highlights from the ratings report include:
  • The debt-to-equity ratio of 1.39 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, ALDW maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for ALON USA PARTNERS LP is currently extremely low, coming in at 13.33%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ALDW's net profit margin of 9.17% compares favorably to the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ALON USA PARTNERS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.3%. Since the same quarter one year prior, revenues slightly dropped by 4.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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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