3 Stocks Pushing The Utilities Sector Lower

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.

The Utilities sector as a whole was unchanged today versus the S&P 500, which was up 0.8%. Laggards within the Utilities sector included GreenHunter Resources ( GRH), down 2.0%, Pure Cycle ( PCYO), down 1.5%, Centrais Eletricas Brasileiras ( EBR.B), down 2.7%, Centrais Eletricas Brasileiras ( EBR), down 3.8% and CPFL Energy ( CPL), down 1.8%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the sector lower today:

Centrais Eletricas Brasileiras ( EBR.B) is one of the companies that pushed the Utilities sector lower today. Centrais Eletricas Brasileiras was down $0.13 (2.7%) to $4.63 on light volume. Throughout the day, 42,086 shares of Centrais Eletricas Brasileiras exchanged hands as compared to its average daily volume of 204,200 shares. The stock ranged in price between $4.62-$4.77 after having opened the day at $4.74 as compared to the previous trading day's close of $4.76.

Centrais Eletricas Brasileiras S.A. - Eletrobras, together with its subsidiaries, generates, transmits, and distributes electricity in Brazil. It projects, builds, and operates generating power plants, and electric power transmission and distribution lines. Centrais Eletricas Brasileiras has a market cap of $6.4 billion and is part of the energy industry. Shares are up 8.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Centrais Eletricas Brasileiras as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on EBR.B go as follows:

  • Net operating cash flow has significantly decreased to $758.05 million or 58.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for ELETROBRAS-CENTR ELETR BRAS is currently lower than what is desirable, coming in at 27.17%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, EBR.B's net profit margin of 14.06% compares favorably to the industry average.
  • 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 Electric Utilities industry and the overall market, ELETROBRAS-CENTR ELETR BRAS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

You can view the full analysis from the report here: Centrais Eletricas Brasileiras Ratings Report

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At the close, Pure Cycle ( PCYO) was down $0.10 (1.5%) to $6.67 on average volume. Throughout the day, 115,017 shares of Pure Cycle exchanged hands as compared to its average daily volume of 101,400 shares. The stock ranged in price between $6.48-$6.83 after having opened the day at $6.81 as compared to the previous trading day's close of $6.77.

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area. Pure Cycle has a market cap of $156.7 million and is part of the energy industry. Shares are up 7.0% year-to-date as of the close of trading on Monday. 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 find that we feel that the company's cash flow from its operations has been weak overall.

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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Water Utilities industry and the overall market, PURE CYCLE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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

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GreenHunter Resources ( GRH) was another company that pushed the Utilities sector lower today. GreenHunter Resources was down $0.04 (2.0%) to $1.94 on average volume. Throughout the day, 175,906 shares of GreenHunter Resources exchanged hands as compared to its average daily volume of 164,200 shares. The stock ranged in price between $1.92-$2.02 after having opened the day at $2.00 as compared to the previous trading day's close of $1.98.

GreenHunter Resources has a market cap of $63.5 million and is part of the energy industry. Shares are up 70.7% year-to-date as of the close of trading on Monday. Currently there are 3 analysts who rate GreenHunter Resources a buy, no analysts rate it a sell, and none rate it a hold.

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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.

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