Trade-Ideas: Atmos Energy (ATO) Is Today's "Barbarian At The Gate" Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Atmos Energy (ATO) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Atmos Energy as such a stock due to the following factors:
- ATO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.8 million.
- ATO has traded 290,645 shares today.
- ATO traded in a range 207.3% of the normal price range with a price range of $1.35.
- ATO traded above its daily resistance level (quality: 39 days, meaning that the stock is crossing a resistance level set by the last 39 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock s movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.EXCLUSIVE OFFER: Get the inside scoop on opportunities in ATO with the Ticky from Trade-Ideas. See the FREE profile for ATO NOW at Trade-IdeasMore details on ATO: Atmos Energy Corporation, together with its subsidiaries, engages in the distribution, transmission, and storage of natural gas in the United States. It operates in three segments: Natural Gas Distribution, Regulated Transmission and Storage, and Non Regulated. The stock currently has a dividend yield of 3.3%. ATO has a PE ratio of 17.2. Currently there are 2 analysts that rate Atmos Energy a buy, 2 analysts rate it a sell, and 3 rate it a hold.The average volume for Atmos Energy has been 412,300 shares per day over the past 30 days. Atmos Energy has a market cap of $3.8 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.46 and a short float of 2.2% with 4.00 days to cover. Shares are up 19.3% year to date as of the close of trading on Friday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Atmos Energy as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, compelling growth in net income, reasonable valuation levels and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 21.1%. Since the same quarter one year prior, revenues rose by 48.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 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 Gas Utilities industry average. The net income increased by 24.5% when compared to the same quarter one year prior, going from $31.13 million to $38.77 million.
- ATMOS ENERGY CORP has improved earnings per share by 16.1% 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, ATMOS ENERGY CORP reported lower earnings of $2.10 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($2.53 versus $2.10).
- You can view the full Atmos Energy Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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