Alon USA Energy (ALJ) Is Strong 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 Alon USA Energy ( ALJ) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Alon USA Energy as such a stock due to the following factors:

  • ALJ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.3 million.
  • ALJ has traded 135,628 shares today.
  • ALJ is trading at 3.43 times the normal volume for the stock at this time of day.
  • ALJ is trading at a new high 4.03% 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 ALJ:

Alon USA Energy, Inc. engages in refining and marketing petroleum products, primarily in the South Central, Southwestern, and Western regions of the United States. It operates in three segments: Refining and Marketing, Asphalt, and Retail. The stock currently has a dividend yield of 3.6%. ALJ has a PE ratio of 18. Currently there are no analysts that rate Alon USA Energy a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Alon USA Energy has been 1.1 million shares per day over the past 30 days. Alon USA Energy has a market cap of $1.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.31 and a short float of 29.6% with 11.00 days to cover. Shares are up 33.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alon USA Energy as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • ALON USA ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ALON USA ENERGY INC increased its bottom line by earning $0.55 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus $0.55).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 38.5%. Since the same quarter one year prior, revenues fell by 33.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for ALON USA ENERGY INC is currently extremely low, coming in at 13.10%. Regardless of ALJ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.44% trails the industry average.
  • Net operating cash flow has significantly decreased to -$19.22 million or 130.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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