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

  • UPL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $28.0 million.
  • UPL has traded 281,518 shares today.
  • UPL is trading at 2.88 times the normal volume for the stock at this time of day.
  • UPL is trading at a new high 4.42% 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 UPL:

Ultra Petroleum Corp., an independent oil and gas company, engages in the acquisition, exploration, development, production, and operation of oil and natural gas properties in the United States. UPL has a PE ratio of 3. Currently there are 2 analysts that rate Ultra Petroleum a buy, 2 analysts rate it a sell, and 10 rate it a hold.

The average volume for Ultra Petroleum has been 2.7 million shares per day over the past 30 days. Ultra has a market cap of $1.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.92 and a short float of 21.7% with 7.09 days to cover. Shares are down 48.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ultra Petroleum as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 37.8%. Since the same quarter one year prior, revenues slightly increased by 0.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for ULTRA PETROLEUM CORP is rather high; currently it is at 64.05%. Regardless of UPL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, UPL's net profit margin of -9.46% significantly underperformed when compared to the industry average.
  • ULTRA PETROLEUM CORP 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, ULTRA PETROLEUM CORP increased its bottom line by earning $3.51 versus $1.54 in the prior year. For the next year, the market is expecting a contraction of 84.9% in earnings ($0.53 versus $3.51).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 68.39%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 123.52% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 123.3% when compared to the same quarter one year ago, falling from $106.05 million to -$24.67 million.

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