Trade-Ideas LLC identified

FuelCell Energy

(

FCEL

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified FuelCell Energy as such a stock due to the following factors:

  • FCEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.1 million.
  • FCEL has traded 127,840 shares today.
  • FCEL is trading at 2.42 times the normal volume for the stock at this time of day.
  • FCEL is trading at a new low 7.38% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on FCEL:

FuelCell Energy, Inc., together with its subsidiaries, designs, manufactures, sells, installs, operates, and services stationary fuel cell power plants for distributed power generation. Currently there are 5 analysts that rate FuelCell Energy a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for FuelCell Energy has been 632,900 shares per day over the past 30 days. FuelCell Energy has a market cap of $199.9 million and is part of the utilities sector and utilities industry. The stock has a beta of 2.09 and a short float of 13.5% with 5.44 days to cover. Shares are up 28.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates FuelCell Energy as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 against the S&P 500 and did not exceed that of the Electrical Equipment industry. The net income has significantly decreased by 55.4% when compared to the same quarter one year ago, falling from -$9.89 million to -$15.37 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, FUELCELL ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for FUELCELL ENERGY INC is currently extremely low, coming in at 3.62%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -53.78% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$30.09 million or 199.83% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of FCEL's shares over the past 12 months, there is not much good news to report: the stock is down 52.26%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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