3 Stocks Pushing The Utilities Sector Lower

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The Utilities sector as a whole closed the day down 0.3% versus the S&P 500, which was up 0.2%. Laggards within the Utilities sector included American DG Energy ( ADGE), down 2.7%, Centrais Eletricas Brasileiras ( EBR.B), down 3.1%, Ocean Power Technologies ( OPTT), down 11.0%, Niska Gas Storage Partners ( NKA), down 2.8% and Consolidated Water ( CWCO), down 2.6%.

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

Niska Gas Storage Partners ( NKA) is one of the companies that pushed the Utilities sector lower today. Niska Gas Storage Partners was down $0.44 (2.8%) to $15.04 on average volume. Throughout the day, 146,544 shares of Niska Gas Storage Partners exchanged hands as compared to its average daily volume of 118,200 shares. The stock ranged in price between $15.01-$15.73 after having opened the day at $15.55 as compared to the previous trading day's close of $15.48.

Niska Gas Storage Partners LLC owns and operates natural gas storage assets in North America. Niska Gas Storage Partners has a market cap of $567.5 million and is part of the utilities industry. Shares are up 4.9% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Niska Gas Storage Partners a buy, 2 analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates Niska Gas Storage Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from TheStreet Ratings analysis on NKA go as follows:

  • NKA's very impressive revenue growth greatly exceeded the industry average of 3.4%. Since the same quarter one year prior, revenues leaped by 104.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NISKA GAS STORAGE PARTNERS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NISKA GAS STORAGE PARTNERS continued to lose money by earning -$0.24 versus -$0.63 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus -$0.24).
  • The gross profit margin for NISKA GAS STORAGE PARTNERS is currently very high, coming in at 75.18%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.70% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NISKA GAS STORAGE PARTNERS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.28 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, NKA maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.

You can view the full analysis from the report here: Niska Gas Storage Partners Ratings Report

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At the close, Ocean Power Technologies ( OPTT) was down $0.17 (11.0%) to $1.36 on heavy volume. Throughout the day, 692,031 shares of Ocean Power Technologies exchanged hands as compared to its average daily volume of 458,900 shares. The stock ranged in price between $1.36-$1.50 after having opened the day at $1.49 as compared to the previous trading day's close of $1.53.

Ocean Power Technologies, Inc. engages in the development and commercialization of proprietary systems that generate electricity by harnessing the renewable energy of ocean waves primarily in the United States, Europe, Asia, and Australia. Ocean Power Technologies has a market cap of $15.8 million and is part of the utilities industry. Shares are down 20.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Ocean Power Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on OPTT go as follows:

  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electrical Equipment industry and the overall market, OCEAN POWER TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • OPTT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 27.22%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • OPTT, with its very weak revenue results, has greatly underperformed against the industry average of 5.4%. Since the same quarter one year prior, revenues plummeted by 77.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for OCEAN POWER TECHNOLOGIES INC is rather high; currently it is at 55.28%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -371.35% is in-line with the industry average.
  • Net operating cash flow has increased to -$1.57 million or 17.98% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.91%.

You can view the full analysis from the report here: Ocean Power Technologies Ratings Report

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Centrais Eletricas Brasileiras ( EBR.B) was another company that pushed the Utilities sector lower today. Centrais Eletricas Brasileiras was down $0.16 (3.1%) to $5.04 on light volume. Throughout the day, 17,980 shares of Centrais Eletricas Brasileiras exchanged hands as compared to its average daily volume of 110,200 shares. The stock ranged in price between $5.02-$5.11 after having opened the day at $5.09 as compared to the previous trading day's close of $5.20.

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 $6.9 billion and is part of the utilities industry. Shares are up 18.2% year-to-date as of the close of trading on Tuesday.

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.

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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

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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