Trade-Ideas LLC identified

AES

(

AES

) 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 AES as such a stock due to the following factors:

  • AES has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.8 million.
  • AES has traded 5.0 million shares today.
  • AES traded in a range 207.6% of the normal price range with a price range of $0.80.
  • AES traded above its daily resistance level (quality: 104 days, meaning that the stock is crossing a resistance level set by the last 104 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 AES:

The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The stock currently has a dividend yield of 4.5%. AES has a PE ratio of 12. Currently there are 4 analysts that rate AES a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for AES has been 6.4 million shares per day over the past 30 days. AES has a market cap of $6.6 billion and is part of the utilities sector and utilities industry. The stock has a beta of 1.20 and a short float of 2.1% with 2.82 days to cover. Shares are up 0.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AES as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Independent Power Producers & Energy Traders industry and the overall market, AES CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $908.00 million or 19.00% when compared to the same quarter last year. In addition, AES CORP has also modestly surpassed the industry average cash flow growth rate of 16.58%.
  • AES CORP 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. 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, AES CORP increased its bottom line by earning $1.09 versus $0.37 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus $1.09).
  • The debt-to-equity ratio is very high at 5.80 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, AES maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
  • 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 Independent Power Producers & Energy Traders industry. The net income has significantly decreased by 63.1% when compared to the same quarter one year ago, falling from $488.00 million to $180.00 million.

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