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

  • ERF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.4 million.
  • ERF has traded 308,416 shares today.
  • ERF is trading at 3.30 times the normal volume for the stock at this time of day.
  • ERF is trading at a new high 6.01% 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 ERF:

Enerplus Corporation, together with subsidiaries, engages in the exploration and development of crude oil and natural gas in the United States and Canada. The stock currently has a dividend yield of 1.6%. Currently there are 3 analysts that rate Enerplus a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Enerplus has been 1.4 million shares per day over the past 30 days. Enerplus has a market cap of $1.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.17 and a short float of 0.4% with 3.01 days to cover. Shares are up 74.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Enerplus as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Currently the debt-to-equity ratio of 1.54 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, ERF has a quick ratio of 0.53, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENERPLUS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ENERPLUS CORP is currently extremely low, coming in at 2.69%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ERF's net profit margin of -111.23% significantly underperformed when compared to the industry average.
  • Net operating cash flow has decreased to $69.75 million or 46.79% when compared to the same quarter last year. Despite a decrease in cash flow of 46.79%, ENERPLUS CORP is in line with the industry average cash flow growth rate of -49.98%.
  • ERF has underperformed the S&P 500 Index, declining 8.58% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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