Trade-Ideas LLC identified

TerraForm Power

(

TERP

) 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 TerraForm Power as such a stock due to the following factors:

  • TERP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.4 million.
  • TERP has traded 2.7 million shares today.
  • TERP traded in a range 225.2% of the normal price range with a price range of $1.41.
  • TERP traded above its daily resistance level (quality: 54 days, meaning that the stock is crossing a resistance level set by the last 54 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 TERP:

TerraForm Power, Inc. owns and operates solar and wind generation assets serving utility, commercial, and residential customers. The stock currently has a dividend yield of 16.8%. Currently there are 2 analysts that rate TerraForm Power a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for TerraForm Power has been 2.7 million shares per day over the past 30 days. TerraForm has a market cap of $1.2 billion and is part of the utilities sector and utilities industry. Shares are down 30.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates TerraForm Power as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and generally high debt management risk.

Highlights from the ratings report include:

  • 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 286.6% when compared to the same quarter one year ago, falling from $1.91 million to -$3.56 million.
  • Although TERP's debt-to-equity ratio of 2.09 is very high, it is currently less than that of the industry average. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.09, which shows the ability to cover short-term cash needs.
  • TERP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 76.70%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter.
  • The gross profit margin for TERRAFORM POWER INC is currently very high, coming in at 72.93%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -2.18% trails the industry average.
  • Net operating cash flow has significantly increased by 285.17% to $69.96 million when compared to the same quarter last year. In addition, TERRAFORM POWER INC has also vastly surpassed the industry average cash flow growth rate of -50.34%.

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