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Trade-Ideas LLC identified

DTE Energy

(

DTE

) 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 DTE Energy as such a stock due to the following factors:

  • DTE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $69.1 million.
  • DTE has traded 358,471 shares today.
  • DTE traded in a range 200.2% of the normal price range with a price range of $2.09.
  • DTE traded below its daily resistance level (quality: 34 days, meaning that the stock is crossing a resistance level set by the last 34 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 DTE:

TheStreet Recommends

DTE Energy Company engages in the utility operations. The company's Electric segment engages in the generation, purchase, distribution, and sale of electricity to approximately 2.2 million residential, commercial, and industrial customers in southeastern Michigan. The stock currently has a dividend yield of 3.3%. DTE has a PE ratio of 22. Currently there are 3 analysts that rate DTE Energy a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for DTE Energy has been 1.2 million shares per day over the past 30 days. DTE Energy has a market cap of $16.0 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.25 and a short float of 1.5% with 3.39 days to cover. Shares are up 11% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates DTE Energy as a

buy

. Among the primary strengths of the company is its 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:

  • DTE, with its decline in revenue, underperformed when compared the industry average of 4.0%. Since the same quarter one year prior, revenues fell by 19.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • DTE ENERGY CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, DTE ENERGY CO reported lower earnings of $4.06 versus $5.10 in the prior year. This year, the market expects an improvement in earnings ($4.95 versus $4.06).
  • 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 1.12, 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 0.31 is very low and demonstrates very weak liquidity.
  • 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. When compared to other companies in the Multi-Utilities industry and the overall market, DTE ENERGY CO's return on equity is below that of both the industry average and the S&P 500.

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