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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

CMS Energy

(

CMS

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified CMS Energy as such a stock due to the following factors:

  • CMS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.0 million.
  • CMS has traded 463,776 shares today.
  • CMS is trading at 1.71 times the normal volume for the stock at this time of day.
  • CMS crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 CMS:

TheStreet Recommends

CMS Energy Corporation, through its subsidiaries, operates as an energy company primarily in Michigan, the United States. The company operates in three segments: Electric Utility, Gas Utility, and Enterprises. The stock currently has a dividend yield of 4%. CMS has a PE ratio of 17.9. Currently there are 4 analysts that rate CMS Energy a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for CMS Energy has been 2.5 million shares per day over the past 30 days. CMS Energy has a market cap of $7.2 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.17 and a short float of 3.3% with 3.65 days to cover. Shares are up 0% year-to-date as of the close of trading on Wednesday.

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 CMS Energy as a

buy

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 355.55% to $23.00 million when compared to the same quarter last year. In addition, CMS ENERGY CORP has also vastly surpassed the industry average cash flow growth rate of 26.60%.
  • 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, CMS ENERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • CMS ENERGY CORP's earnings per share declined by 16.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CMS ENERGY CORP reported lower earnings of $1.39 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.39).
  • CMS, with its decline in revenue, slightly underperformed the industry average of 0.3%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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

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