Western Refining (WNR) 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 Western Refining ( WNR) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Western Refining as such a stock due to the following factors:

  • WNR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.3 million.
  • WNR has traded 119,116 shares today.
  • WNR is trading at 3.01 times the normal volume for the stock at this time of day.
  • WNR is trading at a new high 3.02% 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 WNR:

Western Refining, Inc. operates as an independent crude oil refiner and marketer of refined products. The company operates in four segments: Refining, NTI, WNRL, and Retail. The stock currently has a dividend yield of 3.2%. WNR has a PE ratio of 7. Currently there are 3 analysts that rate Western Refining a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Western Refining has been 1.5 million shares per day over the past 30 days. Western Refining 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 2.03 and a short float of 4.9% with 3.18 days to cover. Shares are up 13% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Western Refining as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity, attractive valuation levels, good cash flow from operations and increase in stock price during the past year. 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 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 23.9% when compared to the same quarter one year prior, going from $85.55 million to $105.99 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WESTERN REFINING INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 63.94% to $104.98 million when compared to the same quarter last year. In addition, WESTERN REFINING INC has also vastly surpassed the industry average cash flow growth rate of -53.19%.
  • After a year of stock price fluctuations, the net result is that WNR's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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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