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.

Trade-Ideas LLC identified Kinder Morgan ( KMI) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Kinder Morgan as such a stock due to the following factors:

  • KMI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $435.1 million.
  • KMI has a PE ratio of 46.2.
  • KMI is currently in the upper 30% of its 1-year range.
  • KMI is in the upper 25% of its 20-day range.
  • KMI is in the upper 35% of its 5-day range.
  • KMI is currently trading above yesterday's high.
  • KMI has experienced a gap between today's open and yesterday's close of 1.7%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on KMI:

Kinder Morgan, Inc. operates as an energy infrastructure and energy company in North America. The company operates through Natural Gas Pipelines, CO2, Terminals, Products Pipelines, Kinder Morgan Canada, and Other segments. The stock currently has a dividend yield of 4.4%. KMI has a PE ratio of 46.2. Currently there are 11 analysts that rate Kinder Morgan a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Kinder Morgan has been 10.6 million shares per day over the past 30 days. Kinder Morgan has a market cap of $87.6 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.55 and a short float of 10.1% with 6.38 days to cover. Shares are down 2.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Kinder Morgan as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 19.9%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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.
  • 44.29% is the gross profit margin for KINDER MORGAN INC which we consider to be strong. 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 3.18% trails the industry average.
  • Compared to its closing price of one year ago, KMI's share price has jumped by 29.64%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • KINDER MORGAN 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, KINDER MORGAN INC reported lower earnings of $0.95 versus $1.15 in the prior year. For the next year, the market is expecting a contraction of 10.5% in earnings ($0.85 versus $0.95).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 62.7% when compared to the same quarter one year ago, falling from $338.00 million to $126.00 million.

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