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

  • MDU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.5 million.
  • MDU has traded 111,922 shares today.
  • MDU is trading at 3.82 times the normal volume for the stock at this time of day.
  • MDU 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 MDU:

MDU Resources Group, Inc. operates as a diversified natural resource company in the United States. The company's Electric segment generates, transmits, and distributes electricity in Montana, North Dakota, South Dakota, and Wyoming. The stock currently has a dividend yield of 3.7%. Currently there are 2 analysts that rate MDU Resources Group a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for MDU Resources Group has been 1.1 million shares per day over the past 30 days. MDU Resources Group has a market cap of $3.8 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.04 and a short float of 3.6% with 5.08 days to cover. Shares are down 18.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MDU Resources Group as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.79, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that MDU's debt-to-equity ratio is low, the quick ratio, which is currently 0.70, displays a potential problem in covering short-term cash needs.
  • MDU, with its decline in revenue, slightly underperformed the industry average of 9.9%. Since the same quarter one year prior, revenues fell by 11.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MDU RESOURCES GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MDU RESOURCES GROUP INC increased its bottom line by earning $1.53 versus $1.46 in the prior year. For the next year, the market is expecting a contraction of 29.7% in earnings ($1.08 versus $1.53).
  • The gross profit margin for MDU RESOURCES GROUP INC is currently extremely low, coming in at 13.23%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -33.30% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $94.66 million or 30.92% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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