Xcel Energy (XEL) Is Today's Roof Leaker Stock

Trade-Ideas LLC identified Xcel Energy (XEL) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Xcel Energy

(

XEL

) 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 Xcel Energy as such a stock due to the following factors:

  • XEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $98.0 million.
  • XEL has traded 1.3 million shares today.
  • XEL is trading at 1.74 times the normal volume for the stock at this time of day.
  • XEL 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 XEL:

Xcel Energy Inc., through its subsidiaries, engages primarily in the generation, purchase, transmission, distribution, and sale of electricity in the United States. It operates through Regulated Electric Utility, Regulated Natural Gas Utility, and All Other segments. The stock currently has a dividend yield of 3.5%. XEL has a PE ratio of 19. Currently there are 5 analysts that rate Xcel Energy a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Xcel Energy has been 3.4 million shares per day over the past 30 days. Xcel Energy has a market cap of $18.3 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.32 and a short float of 2.5% with 4.39 days to cover. Shares are up 0.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Xcel Energy as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, growth in earnings per share, increase in net income and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • XEL's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 1.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 36.74% is the gross profit margin for XCEL ENERGY INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.69% is above that of the industry average.
  • XCEL ENERGY INC has improved earnings per share by 15.1% 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, XCEL ENERGY INC increased its bottom line by earning $2.03 versus $1.91 in the prior year. This year, the market expects an improvement in earnings ($2.10 versus $2.03).
  • 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 15.7% when compared to the same quarter one year prior, going from $368.58 million to $426.46 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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