3 Stocks Driving The Utilities Sector Higher

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 69 points (0.4%) at 16,675 as of Tuesday, May 27, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,940 issues advancing vs. 1,055 declining with 160 unchanged.

The Utilities sector as a whole closed the day up 0.4% versus the S&P 500, which was up 0.6%. Top gainers within the Utilities sector included GreenHunter Resources ( GRH), up 2.0%, Cadiz ( CDZI), up 1.6%, Pure Cycle ( PCYO), up 5.0%, Delta Natural Gas ( DGAS), up 2.5% and Artesian Resource ( ARTNA), up 1.7%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the sector higher today:

Pure Cycle ( PCYO) is one of the companies that pushed the Utilities sector higher today. Pure Cycle was up $0.28 (5.0%) to $5.82 on light volume. Throughout the day, 42,179 shares of Pure Cycle exchanged hands as compared to its average daily volume of 69,000 shares. The stock ranged in a price between $5.38-$5.83 after having opened the day at $5.62 as compared to the previous trading day's close of $5.54.

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area. Pure Cycle has a market cap of $133.2 million and is part of the utilities industry. Shares are down 12.5% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Pure Cycle a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Pure Cycle as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on PCYO go as follows:

  • PCYO's very impressive revenue growth greatly exceeded the industry average of 10.3%. Since the same quarter one year prior, revenues leaped by 69.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PCYO's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, PCYO has a quick ratio of 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for PURE CYCLE CORP is currently very high, coming in at 80.14%. 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 -61.90% is in-line with the industry average.
  • PCYO has underperformed the S&P 500 Index, declining 20.00% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has significantly decreased to -$1.44 million or 193.26% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Pure Cycle 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.

At the close, Cadiz ( CDZI) was up $0.14 (1.6%) to $8.60 on average volume. Throughout the day, 40,893 shares of Cadiz exchanged hands as compared to its average daily volume of 44,600 shares. The stock ranged in a price between $8.40-$8.64 after having opened the day at $8.52 as compared to the previous trading day's close of $8.46.

Cadiz Inc. operates as a land and water resource development company in the United States. The company is involved in the water resource, and land and agricultural development activities in San Bernardino County properties. Cadiz has a market cap of $136.8 million and is part of the utilities industry. Shares are up 21.6% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Cadiz a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Cadiz as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on CDZI go as follows:

  • 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 Water Utilities industry. The net income has decreased by 3.0% when compared to the same quarter one year ago, dropping from -$5.81 million to -$5.98 million.
  • CADIZ INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CADIZ INC reported poor results of -$1.46 versus -$1.28 in the prior year.
  • Net operating cash flow has slightly increased to -$3.14 million or 2.78% when compared to the same quarter last year. Despite an increase in cash flow, CADIZ INC's cash flow growth rate is still lower than the industry average growth rate of 22.83%.
  • Compared to its closing price of one year ago, CDZI's share price has jumped by 51.42%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in CDZI do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • CDZI's very impressive revenue growth greatly exceeded the industry average of 10.3%. Since the same quarter one year prior, revenues leaped by 192.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.

You can view the full analysis from the report here: Cadiz 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.

GreenHunter Resources ( GRH) was another company that pushed the Utilities sector higher today. GreenHunter Resources was up $0.02 (2.0%) to $1.00 on light volume. Throughout the day, 64,637 shares of GreenHunter Resources exchanged hands as compared to its average daily volume of 88,600 shares. The stock ranged in a price between $0.99-$1.04 after having opened the day at $1.00 as compared to the previous trading day's close of $0.98.

GreenHunter Resources has a market cap of $33.1 million and is part of the utilities industry. Shares are down 15.5% year-to-date as of the close of trading on Friday.

Highlights from TheStreet Ratings analysis on GRH go as follows:

You can view the full analysis from the report here: GreenHunter Resources 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.

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.

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