Trade-Ideas LLC identified

Great Plains Energy

(

GXP

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

  • GXP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.0 million.
  • GXP has traded 151,939 shares today.
  • GXP is trading at 4.80 times the normal volume for the stock at this time of day.
  • GXP is trading at a new low 5.01% 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.

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More details on GXP:

Great Plains Energy Incorporated, through its subsidiaries, generates, transmits, distributes, and sells electricity in the United States. It also provides regulated steam services in St. Joseph, Missouri. The stock currently has a dividend yield of 3.8%. GXP has a PE ratio of 19. Currently there are 3 analysts that rate Great Plains Energy a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Great Plains Energy has been 1.2 million shares per day over the past 30 days. Great Plains Energy has a market cap of $4.2 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.54 and a short float of 2.2% with 3.31 days to cover. Shares are down 3.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Great Plains Energy as a

buy

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 81.57% to $117.30 million when compared to the same quarter last year. In addition, GREAT PLAINS ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -14.09%.
  • After a year of stock price fluctuations, the net result is that GXP's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.
  • GXP, with its decline in revenue, slightly underperformed the industry average of 0.5%. Since the same quarter one year prior, revenues slightly dropped by 6.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for GREAT PLAINS ENERGY INC is currently lower than what is desirable, coming in at 33.40%. Regardless of GXP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.29% trails the industry average.
  • The debt-to-equity ratio of 1.19 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.20, which clearly demonstrates the inability to cover short-term cash needs.

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