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 FirstEnergy ( FE) 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 FirstEnergy as such a stock due to the following factors:
- FE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $148.2 million.
- FE has traded 4.2 million shares today.
- FE traded in a range 237.1% of the normal price range with a price range of $1.55.
- FE traded above its daily resistance level (quality: 195 days, meaning that the stock is crossing a resistance level set by the last 195 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 FE with the Ticky from Trade-Ideas. See the FREE profile for FE NOW at Trade-Ideas More details on FE: FirstEnergy Corp., a diversified energy company, generates, transmits, and distributes electricity in the United States. The company operates through Regulated Distribution, Regulated Transmission, and Competitive Energy Services segments. The stock currently has a dividend yield of 4.3%. FE has a PE ratio of 46.3. Currently there are 3 analysts that rate FirstEnergy a buy, no analysts rate it a sell, and 8 rate it a hold. The average volume for FirstEnergy has been 4.0 million shares per day over the past 30 days. FirstEnergy has a market cap of $14.2 billion and is part of the utilities sector and utilities industry. The stock has a beta of -0.07 and a short float of 2% with 1.70 days to cover. Shares are up 1.7% year-to-date as of the close of trading on Monday. 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 FirstEnergy as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- FE's revenue growth has slightly outpaced the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 12.5%. 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.
- The net income growth from the same quarter one year ago has exceeded that of the Electric Utilities industry average, but is less than that of the S&P 500. The net income increased by 6.1% when compared to the same quarter one year prior, going from $196.00 million to $208.00 million.
- FIRSTENERGY CORP's earnings per share declined by 37.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FIRSTENERGY CORP reported lower earnings of $0.90 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($2.48 versus $0.90).
- The gross profit margin for FIRSTENERGY CORP is rather low; currently it is at 16.69%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 4.96% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$92.00 million or 284.00% 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 FirstEnergy 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.