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 closed the day down 1.4% versus the S&P 500, which was down 0.6%. Laggards within the Utilities sector included Artesian Resource ( ARTNA), down 1.8%, Centrais Eletricas Brasileiras ( EBR.B), down 2.9%, Cadiz ( CDZI), down 3.2%, Gas Natural ( EGAS), down 2.0% and Niska Gas Storage Partners ( NKA), down 1.9%.

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

Cadiz ( CDZI) is one of the companies that pushed the Utilities sector lower today. Cadiz was down $0.39 (3.2%) to $11.71 on average volume. Throughout the day, 71,215 shares of Cadiz exchanged hands as compared to its average daily volume of 86,800 shares. The stock ranged in price between $11.63-$12.25 after having opened the day at $12.14 as compared to the previous trading day's close of $12.10.

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 $201.2 million and is part of the utilities industry. Shares are up 73.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Cadiz as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in 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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Water Utilities industry average. The net income has decreased by 1.2% when compared to the same quarter one year ago, dropping from -$4.46 million to -$4.52 million.
  • CADIZ INC's earnings per share improvement from the most recent quarter was slightly positive. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CADIZ INC reported poor results of -$1.46 versus -$1.28 in the prior year.
  • The gross profit margin for CADIZ INC is currently very high, coming in at 100.00%. CDZI has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, CDZI's net profit margin of -41045.45% significantly underperformed when compared to the industry average.
  • Net operating cash flow has increased to -$2.12 million or 44.55% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.18%.
  • Investors have driven up the company's shares by 169.52% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.

You can view the full analysis from the report here: Cadiz Ratings Report

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At the close, Centrais Eletricas Brasileiras ( EBR.B) was down $0.14 (2.9%) to $4.69 on average volume. Throughout the day, 125,582 shares of Centrais Eletricas Brasileiras exchanged hands as compared to its average daily volume of 87,500 shares. The stock ranged in price between $4.62-$4.78 after having opened the day at $4.71 as compared to the previous trading day's close of $4.83.

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 $6.5 billion and is part of the utilities industry. Shares are up 9.8% year-to-date as of the close of trading on Thursday.

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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 unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on EBR.B 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 Electric Utilities industry. The net income has significantly decreased by 149.0% when compared to the same quarter one year ago, falling from $75.75 million to -$37.13 million.
  • The gross profit margin for ELETROBRAS-CENTR ELETR BRAS is currently extremely low, coming in at 7.44%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -1.16% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $146.37 million or 80.21% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 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 0.77 is somewhat weak and could be cause for future problems.

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

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Artesian Resource ( ARTNA) was another company that pushed the Utilities sector lower today. Artesian Resource was down $0.37 (1.8%) to $20.83 on average volume. Throughout the day, 19,208 shares of Artesian Resource exchanged hands as compared to its average daily volume of 19,300 shares. The stock ranged in price between $20.83-$21.24 after having opened the day at $21.21 as compared to the previous trading day's close of $21.20.

Artesian Resources Corporation, through its subsidiaries, provides water, wastewater, and other services on the Delmarva Peninsula. It distributes and sells water to residential, commercial, industrial, municipal, and utility customers in the states of Delaware, Maryland, and Pennsylvania. Artesian Resource has a market cap of $168.7 million and is part of the utilities industry. Shares are down 7.6% year-to-date as of the close of trading on Thursday. Currently there are 2 analysts who rate Artesian Resource a buy, 1 analyst rates it a sell, and 1 rates it a hold.

TheStreet Ratings rates Artesian Resource as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from TheStreet Ratings analysis on ARTNA go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 0.6%. 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 debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.34 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Net operating cash flow has slightly increased to $4.97 million or 8.27% when compared to the same quarter last year. Despite an increase in cash flow, ARTESIAN RESOURCES's average is still marginally south of the industry average growth rate of 17.18%.
  • 39.77% is the gross profit margin for ARTESIAN RESOURCES which we consider to be strong. Regardless of ARTNA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.96% trails the industry average.
  • ARTESIAN RESOURCES's earnings per share declined by 21.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, ARTESIAN RESOURCES reported lower earnings of $0.93 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.04 versus $0.93).

You can view the full analysis from the report here: Artesian Resource 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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