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

  • TCP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.6 million.
  • TCP has traded 51,132 shares today.
  • TCP is trading at 2.08 times the normal volume for the stock at this time of day.
  • TCP 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 TCP:

TC PipeLines, LP acquires, owns, and participates in the management of energy infrastructure businesses in North America. The stock currently has a dividend yield of 5.3%. TCP has a PE ratio of 24. Currently there are 2 analysts that rate TC Pipelines a buy, 2 analysts rate it a sell, and 3 rate it a hold.

The average volume for TC Pipelines has been 154,000 shares per day over the past 30 days. TC Pipelines has a market cap of $4.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.43 and a short float of 1.9% with 6.57 days to cover. Shares are down 9.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates TC Pipelines as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The gross profit margin for TC PIPELINES LP is currently very high, coming in at 80.46%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 65.51% significantly outperformed against the industry average.
  • TC PIPELINES LP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, TC PIPELINES LP increased its bottom line by earning $2.67 versus $2.13 in the prior year. This year, the market expects an improvement in earnings ($2.94 versus $2.67).
  • Despite the stagnant revenue growth, the company outperformed against the industry average of 38.6%. Since the same quarter one year prior, revenues have remained constant. Even though the company's revenue remained stagnant, the earnings per share decreased.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has remained constant at $57.00 million when compared to the same quarter one year ago.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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