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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 $4.1 million.
  • CPL has traded 53,298 shares today.
  • CPL is trading at 2.21 times the normal volume for the stock at this time of day.
  • CPL is trading at a new low 4.02% 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.

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More details on CPL:

TheStreet Recommends

CPFL Energia S.A., together with its subsidiaries, generates, distributes, and sells electricity to industrial, residential, commercial, rural, and other consumers in Brazil. The company generates electricity through hydroelectric, thermoelectric, biomass, solar energy, and wind power plants. The stock currently has a dividend yield of 3.9%. CPL has a PE ratio of 11. Currently there is 1 analyst that rates CPFL Energy a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for CPFL Energy has been 417,200 shares per day over the past 30 days. CPFL Energy has a market cap of $4.4 billion and is part of the utilities sector and utilities industry. Shares are down 35.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates CPFL Energy as a

hold

. Among the primary strengths of the company is its revenue growth. 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:

  • The revenue growth came in higher than the industry average of 2.1%. Since the same quarter one year prior, revenues rose by 23.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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.
  • The gross profit margin for CPFL ENERGIA SA is currently extremely low, coming in at 7.04%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.38% trails that of the industry average.
  • CPFL ENERGIA SA's earnings per share declined by 48.4% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, CPFL ENERGIA SA reported lower earnings of $0.71 versus $0.78 in the prior year. For the next year, the market is expecting a contraction of 52.5% in earnings ($0.34 versus $0.71).
  • 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 46.2% when compared to the same quarter one year ago, falling from $76.59 million to $41.18 million.

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