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 Memorial Production Partners ( MEMP) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Memorial Production Partners as such a stock due to the following factors:

  • MEMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.1 million.
  • MEMP has traded 84,982 shares today.
  • MEMP is up 3% today.
  • MEMP was down 14.5% yesterday.

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More details on MEMP:

Memorial Production Partners LP, through its subsidiary, engages in the acquisition, development, exploitation, and production of oil and natural gas properties. The stock currently has a dividend yield of 20.1%. MEMP has a PE ratio of 34. Currently there are 7 analysts that rate Memorial Production Partners a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Memorial Production Partners has been 760,300 shares per day over the past 30 days. Memorial Production has a market cap of $921.7 million and is part of the basic materials sector and energy industry. The stock has a beta of 0.25 and a short float of 3.1% with 1.46 days to cover. Shares are down 28.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Memorial Production Partners as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $71.96 million or 49.85% when compared to the same quarter last year. In addition, MEMORIAL PRODUCTION PRTRS LP has also vastly surpassed the industry average cash flow growth rate of -48.80%.
  • Despite the weak revenue results, MEMP has outperformed against the industry average of 37.8%. Since the same quarter one year prior, revenues fell by 20.6%. 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 394.2% when compared to the same quarter one year ago, falling from -$32.95 million to -$162.82 million.
  • Currently the debt-to-equity ratio of 1.74 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.46, which clearly demonstrates the inability to cover short-term cash needs.

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