American Water Works (AWK) Shows 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 American Water Works as such a stock due to the following factors:
- AWK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.4 million.
- AWK has traded 121,931 shares today.
- AWK traded in a range 206.6% of the normal price range with a price range of $1.91.
- AWK traded below its daily resistance level (quality: 21 days, meaning that the stock is crossing a resistance level set by the last 21 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.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in AWK with the Ticky from Trade-Ideas. See the FREE profile for AWK NOW at Trade-Ideas
More details on AWK:
American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States and Canada. The company operates through two segments, Regulated Businesses and Market-Based Operations. The stock currently has a dividend yield of 2.4%. AWK has a PE ratio of 23. Currently there are 10 analysts that rate American Water Works a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for American Water Works has been 946,800 shares per day over the past 30 days. American Water Works has a market cap of $10.5 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.38 and a short float of 1.3% with 2.62 days to cover. Shares are up 9.2% year-to-date as of the close of trading on Thursday.
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.
Analysis:
rates American Water Works as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, expanding profit margins and solid stock price performance. We feel its 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:
- AMERICAN WATER WORKS CO INC has improved earnings per share by 10.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AMERICAN WATER WORKS CO INC increased its bottom line by earning $2.39 versus $2.07 in the prior year. This year, the market expects an improvement in earnings ($2.61 versus $2.39).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Water Utilities industry average. The net income increased by 14.3% when compared to the same quarter one year prior, going from $152.19 million to $173.89 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 5.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for AMERICAN WATER WORKS CO INC is rather high; currently it is at 52.72%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 19.40% trails the industry average.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full American Water Works Ratings Report.
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.