Trade-Ideas LLC identified Enterprise Products Partners ( EPD) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Enterprise Products Partners as such a stock due to the following factors:
- EPD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $147.6 million.
- EPD has traded 804,647 shares today.
- EPD is trading at 1.62 times the normal volume for the stock at this time of day.
- EPD crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend. EXCLUSIVE OFFER: Get the inside scoop on opportunities in EPD with the Ticky from Trade-Ideas. See the FREE profile for EPD NOW at Trade-Ideas More details on EPD: Enterprise Products Partners L.P., a master limited partnership, provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The stock currently has a dividend yield of 5.9%. EPD has a PE ratio of 21. Currently there are 19 analysts that rate Enterprise Products Partners a buy, no analysts rate it a sell, and 1 rates it a hold. The average volume for Enterprise Products Partners has been 6.3 million shares per day over the past 30 days. Enterprise has a market cap of $53.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.81 and a short float of 0.9% with 2.01 days to cover. Shares are up 1.3% year-to-date as of the close of trading on Monday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Enterprise Products Partners as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and notable return on equity. 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 net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 3.9% when compared to the same quarter one year prior, going from $636.10 million to $661.20 million.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 34.1%. Since the same quarter one year prior, revenues fell by 33.0%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- ENTERPRISE PRODS PRTNRS -LP reported flat earnings per share in the most recent quarter. 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, ENTERPRISE PRODS PRTNRS -LP reported lower earnings of $1.26 versus $1.48 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $1.26).
- EPD has underperformed the S&P 500 Index, declining 18.89% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The debt-to-equity ratio of 1.09 is relatively high when compared with the industry average, suggesting a need for better debt level management.
- You can view the full Enterprise Products Partners Ratings Report.
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