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Trade-Ideas LLC identified

Ameren

(

AEE

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ameren as such a stock due to the following factors:

  • AEE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $87.6 million.
  • AEE has traded 759,822 shares today.
  • AEE traded in a range 203.8% of the normal price range with a price range of $1.55.
  • AEE traded above its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on AEE:

Ameren Corporation operates as a public utility holding company in the United States. The company engages in the rate-regulated electric generation, transmission, and distribution in Missouri; and rate-regulated natural gas transmission and distribution businesses in Illinois. The stock currently has a dividend yield of 3.4%. AEE has a PE ratio of 21. Currently there are 4 analysts that rate Ameren a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Ameren has been 2.1 million shares per day over the past 30 days. Ameren has a market cap of $12.0 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.36 and a short float of 2.4% with 3.36 days to cover. Shares are up 14.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ameren as a

buy

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and solid stock price performance. We feel its 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 increased to $489.00 million or 40.51% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.54%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.8%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • AMEREN CORP's earnings per share declined by 36.8% 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, AMEREN CORP reported lower earnings of $2.38 versus $2.41 in the prior year. This year, the market expects an improvement in earnings ($2.51 versus $2.38).
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Even though the current debt-to-equity ratio is 1.07, it is still below the industry average, suggesting that this level of debt is acceptable within the Multi-Utilities industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.37 is very low and demonstrates very weak liquidity.

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