Sempra Energy (SRE) Spotted As Roof Leaker Today
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
(
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sempra Energy as such a stock due to the following factors:
- SRE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $109.3 million.
- SRE has traded 369,488 shares today.
- SRE is trading at 2.51 times the normal volume for the stock at this time of day.
- SRE crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on SRE:
Sempra Energy, an energy-services holding company, develops energy infrastructure, operates utilities, and provides related services. The company's San Diego Gas & Electric Company segment generates, transmits, and distributes electricity; and distributes, transmits, and stores natural gas. The stock currently has a dividend yield of 2.6%. SRE has a PE ratio of 23.3. Currently there are 8 analysts that rate Sempra Energy a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Sempra Energy has been 996,000 shares per day over the past 30 days. Sempra Energy has a market cap of $26.7 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.28 and a short float of 1% with 2.14 days to cover. Shares are down 2.3% year-to-date as of the close of trading on Thursday.
Analysis:
rates Sempra Energy as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, growth in earnings per share, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- SRE's revenue growth has slightly outpaced the industry average of 2.9%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Multi-Utilities industry average, but is less than that of the S&P 500. The net income increased by 5.3% when compared to the same quarter one year prior, going from $282.00 million to $297.00 million.
- SEMPRA ENERGY's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, SEMPRA ENERGY increased its bottom line by earning $4.64 versus $4.02 in the prior year. This year, the market expects an improvement in earnings ($4.85 versus $4.64).
- 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. 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.
- Net operating cash flow has increased to $500.00 million or 10.13% when compared to the same quarter last year. Despite an increase in cash flow, SEMPRA ENERGY's cash flow growth rate is still lower than the industry average growth rate of 45.73%.
- You can view the full Sempra Energy Ratings Report.
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