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

  • NR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.5 million.
  • NR has traded 129,307 shares today.
  • NR is trading at 4.45 times the normal volume for the stock at this time of day.
  • NR is trading at a new high 11.76% 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 NR:

Newpark Resources, Inc. provides various products and services primarily to the oil and gas exploration industry. The company operates in two segments, Fluids Systems, and Mats and Integrated Services. NR has a PE ratio of 11. Currently there are 4 analysts that rate Newpark Resources a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Newpark Resources has been 1.1 million shares per day over the past 30 days. Newpark has a market cap of $646.0 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.28 and a short float of 5% with 3.21 days to cover. Shares are down 23.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Newpark Resources as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • NR's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.77, which clearly demonstrates the ability to cover short-term cash needs.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 22.1%. Since the same quarter one year prior, revenues fell by 14.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 97.2% when compared to the same quarter one year ago, falling from $35.01 million to $0.99 million.
  • The gross profit margin for NEWPARK RESOURCES is rather low; currently it is at 21.37%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.47% trails that of the industry average.

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