RSP Permian (RSPP) Stock: Weak On High Volume Today

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

  • RSPP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.0 million.
  • RSPP has traded 100,240 shares today.
  • RSPP is trading at 4.55 times the normal volume for the stock at this time of day.
  • RSPP is trading at a new low 3.05% 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 RSPP:

RSP Permian, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. RSPP has a PE ratio of 14. Currently there are 8 analysts that rate RSP Permian a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for RSP Permian has been 1.1 million shares per day over the past 30 days. RSP Permian has a market cap of $2.4 billion and is part of the basic materials sector and energy industry. Shares are up 10% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates RSP Permian as a sell. The area that we feel has been the company's primary weakness has been its relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • In its most recent trading session, RSPP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • Despite the weak revenue results, RSPP has outperformed against the industry average of 37.4%. Since the same quarter one year prior, revenues fell by 11.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • RSP PERMIAN INC 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, RSP PERMIAN INC swung to a loss, reporting -$0.07 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($0.56 versus -$0.07).
  • In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, RSP PERMIAN INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • 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 99.2% when compared to the same quarter one year prior, rising from -$127.53 million to -$1.02 million.

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