Today's Water-Logged And Getting Wetter Stock: Alliant Energy (LNT)

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 Alliant Energy ( LNT) 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 Alliant Energy as such a stock due to the following factors:

  • LNT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.5 million.
  • LNT has traded 338,746 shares today.
  • LNT traded in a range 293.9% of the normal price range with a price range of $2.17.
  • LNT traded below its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 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 LNT:

Alliant Energy Corporation, a utility holding company, provides regulated electricity and natural gas services to residential, commercial, and industrial customers in the Midwest region of the United States. The stock currently has a dividend yield of 3.7%. LNT has a PE ratio of 16.8. Currently there are 6 analysts that rate Alliant Energy a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Alliant Energy has been 529,000 shares per day over the past 30 days. Alliant Energy has a market cap of $6.4 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.41 and a short float of 1.4% with 1.80 days to cover. Shares are up 13.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alliant Energy as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
  • ALLIANT ENERGY CORP's earnings per share declined by 6.3% in the most recent quarter compared to 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, ALLIANT ENERGY CORP increased its bottom line by earning $3.28 versus $2.94 in the prior year. This year, the market expects an improvement in earnings ($3.40 versus $3.28).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Multi-Utilities industry and the overall market on the basis of return on equity, ALLIANT ENERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Even though the current debt-to-equity ratio is 1.04, it is still below the industry average, suggesting that this level of debt is acceptable within the Multi-Utilities industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.27 is very low and demonstrates very weak liquidity.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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