Calpine (CPN) Flagged As A Storm The Castle 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.
Trade-Ideas LLC identified
(
) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Calpine as such a stock due to the following factors:
- CPN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $79.8 million.
- CPN has traded 3.7 million shares today.
- CPN is trading at 1.79 times the normal volume for the stock at this time of day.
- CPN crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 CPN:
Calpine Corporation, a wholesale power generation company, owns and operates natural gas-fired and geothermal power plants in North America. It operates natural gas-fired combustion turbines and renewable geothermal conventional steam turbines. CPN has a PE ratio of 9.1. Currently there are 8 analysts that rate Calpine a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Calpine has been 4.1 million shares per day over the past 30 days. Calpine has a market cap of $7.9 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.90 and a short float of 3.2% with 3.32 days to cover. Shares are down 2.6% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Calpine as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, good cash flow from operations, compelling growth in net income and impressive record of earnings per share growth. 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 greatly exceeded the industry average of 0.4%. Since the same quarter one year prior, revenues rose by 34.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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, CALPINE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Independent Power Producers & Energy Traders industry. The net income increased by 316.5% when compared to the same quarter one year prior, rising from -$97.00 million to $210.00 million.
- Net operating cash flow has significantly increased by 161.19% to $350.00 million when compared to the same quarter last year. In addition, CALPINE CORP has also vastly surpassed the industry average cash flow growth rate of -49.25%.
- CALPINE CORP reported significant earnings per share improvement 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CALPINE CORP increased its bottom line by earning $2.35 versus $0.03 in the prior year. For the next year, the market is expecting a contraction of 61.5% in earnings ($0.91 versus $2.35).
- You can view the full Calpine Ratings Report.
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