Weak On High Volume: Cheniere Energy Partners (CQP)

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

  • CQP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.0 million.
  • CQP has traded 61,469 shares today.
  • CQP is trading at 3.59 times the normal volume for the stock at this time of day.
  • CQP is trading at a new low 4.06% 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 CQP:

Cheniere Energy Partners, L.P., through its subsidiary, Sabine Pass LNG, L.P., owns and operates the Sabine Pass liquefied natural gas (LNG) terminal located on the Sabine Pass deep water shipping channel, Louisiana. The stock currently has a dividend yield of 5.9%. Currently there are 4 analysts that rate Cheniere Energy Partners a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Cheniere Energy Partners has been 344,500 shares per day over the past 30 days. Cheniere Energy has a market cap of $1.6 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.16 and a short float of 2.4% with 2.31 days to cover. Shares are down 2.7% year-to-date as of the close of trading on Wednesday.

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 Cheniere Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and generally higher debt management risk.

Highlights from the ratings report include:
  • CQP's revenue growth has slightly outpaced the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 0.2%. Growth in the company's revenue appears to have helped boost the 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 55.9% when compared to the same quarter one year prior, rising from -$98.11 million to -$43.24 million.
  • The gross profit margin for CHENIERE ENERGY PARTNERS LP is rather high; currently it is at 61.16%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -63.97% is in-line with 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, CHENIERE ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$29.56 million or 443.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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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