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 Edison International ( EIX) 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 Edison International as such a stock due to the following factors:
- EIX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $117.8 million.
- EIX has traded 2.1 million shares today.
- EIX traded in a range 306.9% of the normal price range with a price range of $2.31.
- EIX traded above its daily resistance level (quality: 533 days, meaning that the stock is crossing a resistance level set by the last 533 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in EIX with the Ticky from Trade-Ideas. See the FREE profile for EIX NOW at Trade-Ideas More details on EIX: Edison International, through its subsidiaries, is engaged in the generation and supply of electricity. The company generates electricity through hydroelectric, diesel, natural gas, gas fueled, combustion turbine, nuclear, and photovoltaic sources. The stock currently has a dividend yield of 2.7%. EIX has a PE ratio of 19.7. Currently there are 9 analysts that rate Edison International a buy, no analysts rate it a sell, and 4 rate it a hold. The average volume for Edison International has been 2.1 million shares per day over the past 30 days. Edison International has a market cap of $16.9 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.33 and a short float of 1.5% with 2.17 days to cover. Shares are up 12.3% year-to-date as of the close of trading on Thursday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Edison International as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 163.3% when compared to the same quarter one year prior, rising from -$515.00 million to $326.00 million.
- The debt-to-equity ratio is somewhat low, currently at 0.93, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.20 is very weak and demonstrates a lack of ability to pay short-term obligations.
- EIX, with its decline in revenue, slightly underperformed the industry average of 3.3%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- EDISON INTERNATIONAL 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. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, EDISON INTERNATIONAL reported lower earnings of $2.67 versus $4.57 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $2.67).
- In its most recent trading session, EIX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full Edison International Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.