Today's Weak On High Volume Stock: Crestwood Midstream Partners (CMLP)

Trade-Ideas LLC identified Crestwood Midstream Partners ( CMLP) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Crestwood Midstream Partners as such a stock due to the following factors:

  • CMLP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.7 million.
  • CMLP has traded 187,352 shares today.
  • CMLP is trading at 10.04 times the normal volume for the stock at this time of day.
  • CMLP is trading at a new low 5.03% 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 CMLP:

Crestwood Midstream Partners LP provides gathering, processing, storage, and transportation solutions to customers in the crude oil, natural gas liquids (NGL), and natural gas sectors of the energy industry in the United States. The stock currently has a dividend yield of 22.2%. Currently there are 3 analysts that rate Crestwood Midstream Partners a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Crestwood Midstream Partners has been 700,800 shares per day over the past 30 days. Crestwood Midstream has a market cap of $1.4 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.29 and a short float of 1.8% with 2.83 days to cover. Shares are down 54.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Crestwood Midstream Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 698.8% when compared to the same quarter one year ago, falling from $8.00 million to -$47.90 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CRESTWOOD MIDSTREAM PTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CRESTWOOD MIDSTREAM PTNRS LP is rather low; currently it is at 21.74%. Regardless of CMLP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CMLP's net profit margin of -10.01% significantly underperformed when compared to the industry average.
  • CRESTWOOD MIDSTREAM PTNRS LP's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CRESTWOOD MIDSTREAM PTNRS LP reported poor results of -$0.46 versus -$0.40 in the prior year. This year, the market expects an improvement in earnings (-$0.26 versus -$0.46).
  • This stock's share value has moved by only 68.10% over the past year. 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.

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