Clean Energy Fuels (CLNE) Weak On High Volume

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

  • CLNE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.8 million.
  • CLNE has traded 1.1 million shares today.
  • CLNE is trading at 2.37 times the normal volume for the stock at this time of day.
  • CLNE is trading at a new low 3.02% 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 CLNE:

Clean Energy Fuels Corp. provides natural gas as an alternative fuel for vehicle fleets in the United States and Canada. Currently there are 3 analysts that rate Clean Energy Fuels a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Clean Energy Fuels has been 2.1 million shares per day over the past 30 days. Clean Energy has a market cap of $892.0 million and is part of the utilities sector and utilities industry. Shares are up 105.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Clean Energy Fuels as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally high debt management risk and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CLEAN ENERGY FUELS CORP'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 -$19.60 million or 763.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio of 1.30 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.99, which shows the ability to cover short-term cash needs.
  • CLEAN ENERGY FUELS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CLEAN ENERGY FUELS CORP reported poor results of -$0.95 versus -$0.71 in the prior year. For the next year, the market is expecting a contraction of 1.1% in earnings (-$0.96 versus -$0.95).
  • 39.50% is the gross profit margin for CLEAN ENERGY FUELS CORP 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 1.00% trails the industry average.

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