Plug Power (PLUG) 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 Plug Power ( PLUG) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Plug Power as such a stock due to the following factors:

  • PLUG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.5 million.
  • PLUG has traded 2.5 million shares today.
  • PLUG is trading at 2.85 times the normal volume for the stock at this time of day.
  • PLUG is trading at a new low 3.06% 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 PLUG:

Plug Power Inc., an alternative energy technology provider, is engaged in the design, development, manufacture, and commercialization of fuel cell systems for the industrial off-road markets worldwide. Currently there are 2 analysts that rate Plug Power a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Plug Power has been 13.2 million shares per day over the past 30 days. Plug has a market cap of $699.5 million and is part of the technology sector and electronics industry. The stock has a beta of 0.43 and a short float of 21.2% with 3.58 days to cover. Shares are up 195.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Quant Ratings rates Plug Power as a sell. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$11.05 million or 120.85% 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, PLUG POWER INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PLUG POWER INC is currently extremely low, coming in at 3.91%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, PLUG's net profit margin of 22.38% significantly outperformed against the industry.
  • PLUG's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 9.50, which clearly demonstrates the ability to cover short-term cash needs.
  • This stock has increased by 630.50% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in PLUG do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.


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