Westar Energy (WR) Marked As A Barbarian At The Gate
Trade-Ideas LLC identified
(
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Westar Energy as such a stock due to the following factors:
- WR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.9 million.
- WR has traded 1.4 million shares today.
- WR traded in a range 216.4% of the normal price range with a price range of $1.55.
- WR traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on WR:
Westar Energy, Inc., an electric utility company, generates, transmits, and distributes electricity in Kansas. The company has 7,200 megawatts of electric generation capacity producing electricity through various fuel types, including coal, uranium, natural gas, diesel, wind, and landfill gas. The stock currently has a dividend yield of 3.6%. WR has a PE ratio of 18. Currently there are 4 analysts that rate Westar Energy a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for Westar Energy has been 1.1 million shares per day over the past 30 days. Westar Energy has a market cap of $5.6 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.42 and a short float of 3.4% with 4.40 days to cover. Shares are down 4.2% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Westar Energy as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, expanding profit margins, growth in earnings per share and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- 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 Electric Utilities industry average. The net income increased by 19.1% when compared to the same quarter one year prior, going from $53.47 million to $63.71 million.
- 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 35.32% is the gross profit margin for WESTAR ENERGY INC which we consider to be strong. 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 10.80% trails the industry average.
- WESTAR ENERGY INC has improved earnings per share by 15.0% 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WESTAR ENERGY INC increased its bottom line by earning $2.34 versus $2.28 in the prior year. For the next year, the market is expecting a contraction of 3.8% in earnings ($2.25 versus $2.34).
- WR, with its decline in revenue, slightly underperformed the industry average of 0.5%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Westar Energy Ratings Report.
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