AES Corporation (AES) Showing Signs Of Being Water-Logged And Getting Wetter
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified AES Corporation as such a stock due to the following factors:
- AES has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.6 million.
- AES has traded 433,066 shares today.
- AES traded in a range 222.3% of the normal price range with a price range of $0.57.
- AES traded below its daily resistance level (quality: 33 days, meaning that the stock is crossing a resistance level set by the last 33 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on AES:
The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The stock currently has a dividend yield of 3.7%. AES has a PE ratio of 9. Currently there are 5 analysts that rate AES Corporation a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for AES Corporation has been 6.6 million shares per day over the past 30 days. AES has a market cap of $7.5 billion and is part of the utilities sector and utilities industry. The stock has a beta of 1.26 and a short float of 2% with 2.33 days to cover. Shares are down 21.4% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates AES Corporation as a
. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Independent Power Producers & Energy Traders industry and the overall market, AES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- AES CORP's earnings per share declined by 50.0% 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, AES CORP increased its bottom line by earning $1.09 versus $0.37 in the prior year. This year, the market expects an improvement in earnings ($1.28 versus $1.09).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 14.9%. Since the same quarter one year prior, revenues fell by 10.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The debt-to-equity ratio is very high at 5.37 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, AES maintains a poor quick ratio of 0.71, which illustrates the inability to avoid short-term cash problems.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Independent Power Producers & Energy Traders industry. The net income has significantly decreased by 48.1% when compared to the same quarter one year ago, falling from $133.00 million to $69.00 million.
- You can view the full AES Corporation Ratings Report.
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