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Trade-Ideas: PPL (PPL) 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 PPL ( PPL) 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 PPL as such a stock due to the following factors:

  • PPL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $152.2 million.
  • PPL has traded 3.8 million shares today.
  • PPL traded in a range 527.6% of the normal price range with a price range of $2.22.
  • PPL traded above its daily resistance level (quality: 62 days, meaning that the stock is crossing a resistance level set by the last 62 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.

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More details on PPL:

PPL Corporation, an energy and utility holding company, engages in the generation, transmission, distribution, and sale of electricity to wholesale and retail customers in the United States and the United Kingdom. The company operates in four segments: Kentucky Regulated, U.K. The stock currently has a dividend yield of 4.8%. PPL has a PE ratio of 12.4. Currently there are 3 analysts that rate PPL a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for PPL has been 4.5 million shares per day over the past 30 days. PPL has a market cap of $19.4 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.18 and a short float of 2% with 2.28 days to cover. Shares are up 7.4% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PPL as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 14.1%. Since the same quarter one year prior, revenues rose by 36.3%. 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 Electric Utilities industry. The net income increased by 49.4% when compared to the same quarter one year prior, rising from $271.00 million to $405.00 million.
  • Net operating cash flow has significantly increased by 221.00% to $703.00 million when compared to the same quarter last year. In addition, PPL CORP has also vastly surpassed the industry average cash flow growth rate of 19.90%.
  • 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 Electric Utilities industry and the overall market, PPL CORP's return on equity exceeds that of both the industry average and the S&P 500.

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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