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

  • SU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $117.9 million.
  • SU has traded 1.1 million shares today.
  • SU is trading at 6.49 times the normal volume for the stock at this time of day.
  • SU 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 SU:

Suncor Energy Inc. operates as an integrated energy company. The stock currently has a dividend yield of 2.9%. SU has a PE ratio of 68.7. Currently there are 6 analysts that rate Suncor Energy a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Suncor Energy has been 3.6 million shares per day over the past 30 days. Suncor Energy has a market cap of $46.7 billion and is part of the basic materials sector and energy industry. Shares are up 1.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Suncor Energy as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.25, which illustrates the ability to avoid short-term cash problems.
  • Despite the weak revenue results, SU has outperformed against the industry average of 33.1%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SUNCOR ENERGY INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for SUNCOR ENERGY INC is rather low; currently it is at 20.24%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.94% trails that of the industry average.

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