Trade-Ideas LLC identified MarkWest Energy Partners ( MWE) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified MarkWest Energy Partners as such a stock due to the following factors:

  • MWE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $65.1 million.
  • MWE has traded 252,697 shares today.
  • MWE traded in a range 202.7% of the normal price range with a price range of $3.21.
  • MWE traded below its daily resistance level (quality: 530 days, meaning that the stock is crossing a resistance level set by the last 530 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on MWE:

MarkWest Energy Partners, L.P. engages in the gathering, processing, and transportation of natural gas. The company is also involved in the gathering, transportation, fractionation, storage, and marketing of natural gas liquids; and the gathering and transportation of crude oil. The stock currently has a dividend yield of 7.7%. MWE has a PE ratio of 105. Currently there are 6 analysts that rate MarkWest Energy Partners a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for MarkWest Energy Partners has been 1.7 million shares per day over the past 30 days. MarkWest Energy has a market cap of $9.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.40 and a short float of 2.4% with 3.14 days to cover. Shares are down 28.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MarkWest Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and generally higher debt management risk.

Highlights from the ratings report include:
  • The gross profit margin for MARKWEST ENERGY PARTNERS LP is rather high; currently it is at 53.40%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -22.08% is in-line with the industry average.
  • Despite the weak revenue results, MWE has outperformed against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 11.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MARKWEST ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $162.40 million or 33.56% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 1230.5% when compared to the same quarter one year ago, falling from $8.98 million to -$101.49 million.

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