Tallgrass Energy Partners (TEP) Showing Signs Of Being Strong And Under The Radar

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 Tallgrass Energy Partners ( TEP) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Tallgrass Energy Partners as such a stock due to the following factors:

  • TEP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.4 million.
  • TEP is making at least a new 3-day high.
  • TEP has a PE ratio of 32.
  • TEP is mentioned 1.81 times per day on StockTwits.
  • TEP has not yet been mentioned on StockTwits today.
  • TEP is currently in the upper 20% of its 1-year range.
  • TEP is in the upper 35% of its 20-day range.
  • TEP is in the upper 45% of its 5-day range.
  • TEP is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on TEP:

Tallgrass Energy Partners, LP acquires, owns, develops, and operates various midstream energy assets in North America. The company operates through three segments: Natural Gas Transportation & Logistics; Crude Oil Transportation & Logistics; and Processing & Logistics. The stock currently has a dividend yield of 4.3%. TEP has a PE ratio of 32. Currently there are 6 analysts that rate Tallgrass Energy Partners a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Tallgrass Energy Partners has been 177,300 shares per day over the past 30 days. Tallgrass Energy has a market cap of $2.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.32 and a short float of 1.9% with 2.83 days to cover. Shares are up 7.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Tallgrass Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 38.5%. Since the same quarter one year prior, revenues rose by 21.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TALLGRASS ENERGY PRT LP has improved earnings per share by 46.3% 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 two years. We feel that this trend should continue. During the past fiscal year, TALLGRASS ENERGY PRT LP increased its bottom line by earning $1.55 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $1.55).
  • 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 88.7% when compared to the same quarter one year prior, rising from $17.12 million to $32.32 million.
  • 44.30% is the gross profit margin for TALLGRASS ENERGY PRT LP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 28.18% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 148.06% to $48.64 million when compared to the same quarter last year. In addition, TALLGRASS ENERGY PRT LP has also vastly surpassed the industry average cash flow growth rate of -53.19%.

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