Skip to main content

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

CPFL Energy

(

CPL

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

  • CPL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.6 million.
  • CPL has traded 68,658 shares today.
  • CPL is trading at 2.53 times the normal volume for the stock at this time of day.
  • CPL is trading at a new low 3.02% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in CPL with the Ticky from Trade-Ideas. See the FREE profile for CPL NOW at Trade-Ideas

More details on CPL:

TheStreet Recommends

CPFL Energia S.A., together with its subsidiaries, generates, distributes, and commercializes electricity to industrial, residential, commercial, rural, and other consumers in Brazil. The stock currently has a dividend yield of 6.2%. CPL has a PE ratio of 17.2. Currently there are 2 analysts that rate CPFL Energy a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for CPFL Energy has been 386,000 shares per day over the past 30 days. CPFL Energy has a market cap of $6.7 billion and is part of the utilities sector and utilities industry. Shares are down 13.2% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates CPFL Energy as a

hold

. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 58.34% to $216.67 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.48%.
  • CPL, with its decline in revenue, underperformed when compared the industry average of 5.8%. Since the same quarter one year prior, revenues fell by 13.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Electric Utilities industry and the overall market on the basis of return on equity, CPFL ENERGIA SA has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CPFL ENERGIA SA 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CPFL ENERGIA SA reported lower earnings of $0.80 versus $1.18 in the prior year. For the next year, the market is expecting a contraction of 27.3% in earnings ($0.58 versus $0.80).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electric Utilities industry. The net income has significantly decreased by 85.0% when compared to the same quarter one year ago, falling from $157.84 million to $23.71 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null