Atlantic Power (AT) Stock: Weak On High Volume 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 Atlantic Power ( AT) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Atlantic Power as such a stock due to the following factors:

  • AT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.6 million.
  • AT has traded 655,128 shares today.
  • AT is trading at 6.01 times the normal volume for the stock at this time of day.
  • AT is trading at a new low 4.08% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AT:

Atlantic Power Corporation owns and operates a fleet of power generation assets in the United States and Canada. The stock currently has a dividend yield of 9.6%. Currently there are no analysts that rate Atlantic Power a buy, 3 analysts rate it a sell, and 1 rates it a hold.

The average volume for Atlantic Power has been 1.2 million shares per day over the past 30 days. Atlantic has a market cap of $459.9 million and is part of the utilities sector and utilities industry. The stock has a beta of 0.71 and a short float of 5.3% with 2.11 days to cover. Shares are down 26.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Atlantic Power as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:
  • 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 Independent Power Producers & Energy Traders industry. The net income has significantly decreased by 1870.0% when compared to the same quarter one year ago, falling from -$3.00 million to -$59.10 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Independent Power Producers & Energy Traders industry and the overall market, ATLANTIC POWER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 3.67 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, AT's quick ratio is somewhat strong at 1.37, demonstrating the ability to handle short-term liquidity needs.
  • The share price of ATLANTIC POWER CORP has not done very well: it is down 5.70% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • ATLANTIC POWER CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. 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, ATLANTIC POWER CORP continued to lose money by earning -$0.24 versus -$1.10 in the prior year.

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