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

  • EXH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.4 million.
  • EXH has traded 70,437 shares today.
  • EXH is trading at 3.73 times the normal volume for the stock at this time of day.
  • EXH is trading at a new high 4.08% 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 EXH:

Exterran Holdings, Inc., together with its subsidiaries, provides operations, maintenance, service, and equipment for the oil and natural gas production, processing, and transportation applications. The company's North America Contract Operations segment offers natural gas compression services. The stock currently has a dividend yield of 2.1%. EXH has a PE ratio of 62.5. Currently there are 3 analysts that rate Exterran Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Exterran Holdings has been 1.1 million shares per day over the past 30 days. Exterran has a market cap of $1.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.36 and a short float of 3.5% with 1.54 days to cover. Shares are down 7.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Exterran Holdings as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • 36.82% is the gross profit margin for EXTERRAN HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 4.66% is above that of the industry average.
  • Net operating cash flow has slightly increased to $157.52 million or 6.70% when compared to the same quarter last year. In addition, EXTERRAN HOLDINGS INC has also modestly surpassed the industry average cash flow growth rate of -1.97%.
  • EXH, with its decline in revenue, underperformed when compared the industry average of 10.8%. Since the same quarter one year prior, revenues slightly dropped by 6.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.09 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, EXH maintains a poor quick ratio of 0.87, which illustrates the inability to avoid short-term cash 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 Energy Equipment & Services industry and the overall market, EXTERRAN HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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