Trade-Ideas: MarkWest Energy Partners (MWE) Is Today's Weak On High Relative Volume Stock

Trade-Ideas LLC identified MarkWest Energy Partners ( MWE) as a weak on high relative volume 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 $159.4 million.
  • MWE has traded 568,735 shares today.
  • MWE is trading at 10.74 times the normal volume for the stock at this time of day.
  • MWE 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 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 8.1%. 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 1.6 million shares per day over the past 30 days. MarkWest Energy has a market cap of $9.1 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 2.1% with 1.09 days to cover. Shares are down 33% year-to-date as of the close of trading on Wednesday.

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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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for MARKWEST ENERGY PARTNERS LP is rather high; currently it is at 58.84%. It has increased significantly from the same period last year. Along with this, the net profit margin of 6.14% is above that of the industry average.
  • Net operating cash flow has increased to $205.11 million or 47.28% when compared to the same quarter last year. In addition, MARKWEST ENERGY PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -26.26%.
  • Despite the weak revenue results, MWE has outperformed against the industry average of 36.7%. Since the same quarter one year prior, revenues fell by 21.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MWE's debt-to-equity ratio of 0.98 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MWE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.64 is low and demonstrates weak liquidity.
  • 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 on the basis of return on equity, MARKWEST ENERGY PARTNERS LP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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