Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) 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 Pepco Holdings as such a stock due to the following factors:
- POM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.0 million.
- POM has traded 2.0 million shares today.
- POM traded in a range 214.4% of the normal price range with a price range of $0.82.
- POM traded above its daily resistance level (quality: 359 days, meaning that the stock is crossing a resistance level set by the last 359 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 POM:
Pepco Holdings, Inc., through its subsidiaries, is engaged in the transmission, distribution, and supply of electricity. The company also distributes and supplies natural gas. The stock currently has a dividend yield of 5.3%. POM has a PE ratio of 45.2. Currently there is 1 analyst that rates Pepco Holdings a buy, 1 analyst rates it a sell, and 10 rate it a hold.
The average volume for Pepco Holdings has been 2.3 million shares per day over the past 30 days. Pepco has a market cap of $5.4 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.20 and a short float of 4.4% with 4.83 days to cover. Shares are up 14.2% year-to-date as of the close of trading on Friday.
rates Pepco Holdings as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PEPCO HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PEPCO HOLDINGS INC reported lower earnings of $0.34 versus $0.95 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus $0.34).
- Net operating cash flow has increased to $230.00 million or 32.94% when compared to the same quarter last year. Despite an increase in cash flow, PEPCO HOLDINGS INC's cash flow growth rate is still lower than the industry average growth rate of 44.78%.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electric Utilities industry average, but is greater than that of the S&P 500. The net income increased by 34.9% when compared to the same quarter one year prior, rising from $43.00 million to $58.00 million.
- The gross profit margin for PEPCO HOLDINGS INC is currently lower than what is desirable, coming in at 25.66%. Regardless of POM'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 5.31% trails the industry average.
- You can view the full Pepco Holdings Ratings Report.