Trade-Ideas: Teekay LNG Partners (TGP) Is Today's Strong On High Relative Volume Stock

Trade-Ideas LLC identified Teekay LNG Partners ( TGP) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Teekay LNG Partners as such a stock due to the following factors:

  • TGP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.7 million.
  • TGP has traded 78,618 shares today.
  • TGP is trading at 2.45 times the normal volume for the stock at this time of day.
  • TGP is trading at a new high 3.13% 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 TGP:

Teekay LNG Partners L.P. provides marine transportation services for liquefied natural gas (LNG), liquefied petroleum gas (LPG), and crude oil worldwide. The stock currently has a dividend yield of 5.5%. TGP has a PE ratio of 4. Currently there is 1 analyst that rates Teekay LNG Partners a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Teekay LNG Partners has been 734,800 shares per day over the past 30 days. Teekay LNG has a market cap of $805.5 million and is part of the services sector and transportation industry. The stock has a beta of 0.97 and a short float of 2% with 2.06 days to cover. Shares are down 22.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Teekay LNG Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, 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 33.0%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 119.2% when compared to the same quarter one year prior, rising from $32.96 million to $72.22 million.
  • TEEKAY LNG PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TEEKAY LNG PARTNERS LP reported lower earnings of $2.21 versus $2.30 in the prior year. This year, the market expects an improvement in earnings ($2.22 versus $2.21).
  • TGP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 73.43%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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 debt-to-equity ratio of 1.36 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.44, which clearly demonstrates the inability to cover short-term cash needs.

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