Trade-Ideas LLC identified

Westar Energy

(

WR

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

  • WR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.6 million.
  • WR has traded 536,534 shares today.
  • WR traded in a range 237.4% of the normal price range with a price range of $2.14.
  • WR traded below its daily resistance level (quality: 12 days, meaning that the stock is crossing a resistance level set by the last 12 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 WR:

Westar Energy, Inc., an electric utility company, generates, transmits, and distributes electricity in Kansas. The company has 7,200 megawatts of electric generation capacity producing electricity through various fuel types, including coal, uranium, natural gas, diesel, wind, and landfill gas. The stock currently has a dividend yield of 3.1%. WR has a PE ratio of 22. Currently there are 3 analysts that rate Westar Energy a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Westar Energy has been 1.0 million shares per day over the past 30 days. Westar Energy has a market cap of $6.5 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.31 and a short float of 1.8% with 3.20 days to cover. Shares are up 9.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Westar Energy as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and 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:

  • 45.41% is the gross profit margin for WESTAR ENERGY INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.83% is above that of the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.1%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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.
  • WESTAR ENERGY INC's earnings per share declined by 11.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WESTAR ENERGY INC increased its bottom line by earning $2.34 versus $2.28 in the prior year. For the next year, the market is expecting a contraction of 5.5% in earnings ($2.21 versus $2.34).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Electric Utilities industry average. The net income has decreased by 6.4% when compared to the same quarter one year ago, dropping from $147.38 million to $138.00 million.

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