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Trade-Ideas LLC identified

DTE Energy

(

DTE

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

  • DTE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $93.0 million.
  • DTE has traded 273,090 shares today.
  • DTE is trading at 3.52 times the normal volume for the stock at this time of day.
  • DTE 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 DTE:

TheStreet Recommends

DTE Energy Company operates in the utility operations. The company's Electric segment engages in the generation, purchase, distribution, and sale of electricity to approximately 2.1 million residential, commercial, and industrial customers in southeastern Michigan. The stock currently has a dividend yield of 3.6%. DTE has a PE ratio of 15. Currently there are 2 analysts that rate DTE Energy a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for DTE Energy has been 1.1 million shares per day over the past 30 days. DTE Energy has a market cap of $14.5 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.31 and a short float of 1.1% with 1.68 days to cover. Shares are down 7.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates DTE Energy as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • DTE's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 0.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Multi-Utilities industry. The net income increased by 69.9% when compared to the same quarter one year prior, rising from $156.00 million to $265.00 million.
  • Net operating cash flow has increased to $288.00 million or 29.72% when compared to the same quarter last year. In addition, DTE ENERGY CO has also modestly surpassed the industry average cash flow growth rate of 20.99%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Multi-Utilities industry and the overall market on the basis of return on equity, DTE ENERGY CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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