SCANA (SCG) Roof Leaking Today

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 SCANA ( SCG) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified SCANA as such a stock due to the following factors:

  • SCG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.2 million.
  • SCG has traded 552,324 shares today.
  • SCG is trading at 1.88 times the normal volume for the stock at this time of day.
  • SCG crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on SCG:

SCANA Corporation, through its subsidiaries, is engaged in the generation, transmission, distribution, and sale of electricity to retail and wholesale customers in South Carolina. It owns nuclear, coal, hydro, natural gas and oil, and biomass generating facilities. The stock currently has a dividend yield of 4.3%. SCG has a PE ratio of 13.2. Currently there are 2 analysts that rate SCANA a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for SCANA has been 757,100 shares per day over the past 30 days. SCANA has a market cap of $7.0 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.24 and a short float of 3.8% with 4.69 days to cover. Shares are up 7% year-to-date as of the close of trading on Friday.

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 SCANA as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • SCANA CORP has improved earnings per share by 13.3% 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 two years. We feel that this trend should continue. During the past fiscal year, SCANA CORP increased its bottom line by earning $3.38 versus $3.14 in the prior year. This year, the market expects an improvement in earnings ($3.62 versus $3.38).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 1.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Multi-Utilities industry average. The net income increased by 11.6% when compared to the same quarter one year prior, going from $86.00 million to $96.00 million.
  • In its most recent trading session, SCG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • The gross profit margin for SCANA CORP is rather low; currently it is at 24.27%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 9.35% trails that of the industry average.

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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