Today's Weak On High Volume Stock: Pattern Energy Group (PEGI)

Trade-Ideas LLC identified Pattern Energy Group (PEGI) as a weak on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Pattern Energy Group

(

PEGI

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Pattern Energy Group as such a stock due to the following factors:

  • PEGI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.1 million.
  • PEGI has traded 132,683 shares today.
  • PEGI is trading at 2.85 times the normal volume for the stock at this time of day.
  • PEGI is trading at a new low 3.10% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. 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 (or avoid losses by trimming weak positions). 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 PEGI:

Pattern Energy Group Inc., an independent power company, owns and operates power projects in the United States, Canada, and Chile. As of September 3, 2015, the company owned interests in 16 wind power projects with the capacity of 2,282 megawatts. The stock currently has a dividend yield of 8.2%. Currently there are 9 analysts that rate Pattern Energy Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Pattern Energy Group has been 873,500 shares per day over the past 30 days. Pattern Energy Group has a market cap of $1.4 billion and is part of the utilities sector and utilities industry. Shares are down 22.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Pattern Energy Group as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 12.6%. Since the same quarter one year prior, revenues rose by 25.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for PATTERN ENERGY GROUP INC is rather high; currently it is at 67.84%. 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 -32.78% is in-line with the industry average.
  • PATTERN ENERGY GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PATTERN ENERGY GROUP INC reported poor results of -$0.55 versus -$0.24 in the prior year. This year, the market expects an improvement in earnings (-$0.40 versus -$0.55).
  • The debt-to-equity ratio is very high at 2.17 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.27, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Independent Power Producers & Energy Traders industry and the overall market, PATTERN ENERGY GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.

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