3 Stocks Pushing The Utilities Sector Lower

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The Utilities sector as a whole closed the day down 1.3% versus the S&P 500, which was down 0.8%. Laggards within the Utilities sector included American DG Energy ( ADGE), down 5.6%, U S Geothermal ( HTM), down 6.3%, Centrais Eletricas Brasileiras ( EBR.B), down 3.5%, Cadiz ( CDZI), down 4.8% and Brookfield Renewable Energy Partners ( BEP), down 2.6%.

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 $0.52 (4.8%) to $10.24 on heavy volume. Throughout the day, 147,360 shares of Cadiz exchanged hands as compared to its average daily volume of 91,100 shares. The stock ranged in price between $10.20-$11.17 after having opened the day at $10.72 as compared to the previous trading day's close of $10.76.

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 $185.4 million and is part of the utilities industry. Shares are up 54.6% year-to-date as of the close of trading on Friday.

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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 18.41%.
  • Investors have driven up the company's shares by 114.20% 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 $0.16 (3.5%) to $4.39 on heavy volume. Throughout the day, 206,016 shares of Centrais Eletricas Brasileiras exchanged hands as compared to its average daily volume of 89,000 shares. The stock ranged in price between $4.36-$4.47 after having opened the day at $4.43 as compared to the previous trading day's close of $4.55.

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 3.4% year-to-date as of the close of trading on Friday.

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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.
  • In its most recent trading session, EBR.B 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. 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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U S Geothermal ( HTM) was another company that pushed the Utilities sector lower today. U S Geothermal was down $0.04 (6.3%) to $0.56 on light volume. Throughout the day, 259,570 shares of U S Geothermal exchanged hands as compared to its average daily volume of 373,300 shares. The stock ranged in price between $0.55-$0.58 after having opened the day at $0.56 as compared to the previous trading day's close of $0.60.

U S Geothermal has a market cap of $60.2 million and is part of the utilities industry. Shares are up 53.0% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate U S Geothermal a buy, no analysts rate it a sell, and 1 rates it a hold.

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