Trade-Ideas LLC identified

PPL

(

PPL

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified PPL as such a stock due to the following factors:

  • PPL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $123.6 million.
  • PPL has traded 3.5 million shares today.
  • PPL traded in a range 230.7% of the normal price range with a price range of $1.09.
  • PPL traded below its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on PPL:

TheStreet Recommends

PPL Corporation, a utility company, delivers electricity and natural gas in the United States and the United Kingdom. It serves 321,000 natural gas and 397,000 electric customers in Louisville and 16 surrounding counties; and 543,000 customers in 77 Kentucky counties and 5 counties in Virginia. The stock currently has a dividend yield of 4.4%. PPL has a PE ratio of 13. Currently there are 7 analysts that rate PPL a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for PPL has been 4.7 million shares per day over the past 30 days. PPL has a market cap of $23.0 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.49 and a short float of 2.3% with 4.12 days to cover. Shares are down 5.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates PPL as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity, growth in earnings per share and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • 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. 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electric Utilities industry and the overall market, PPL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • PPL CORP has improved earnings per share by 8.8% 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PPL CORP increased its bottom line by earning $2.50 versus $1.69 in the prior year. For the next year, the market is expecting a contraction of 12.0% in earnings ($2.20 versus $2.50).
  • PPL, with its decline in revenue, slightly underperformed the industry average of 1.4%. Since the same quarter one year prior, revenues slightly dropped by 3.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 48.34% is the gross profit margin for PPL CORP which we consider to be strong. Regardless of PPL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PPL's net profit margin of -42.50% significantly underperformed when compared to the industry average.

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