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 0.5% versus the S&P 500, which was down 0.3%. Laggards within the Utilities sector included RGC Resources ( RGCO), down 2.0%, U S Geothermal ( HTM), down 2.0%, Connecticut Water Service ( CTWS), down 1.9%, Cadiz ( CDZI), down 1.6% and Transportadora de Gas del Sur ( TGS), down 2.4%.

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 $0.17 (1.6%) to $10.39 on average volume. Throughout the day, 75,189 shares of Cadiz exchanged hands as compared to its average daily volume of 96,100 shares. The stock ranged in price between $9.87-$10.63 after having opened the day at $10.54 as compared to the previous trading day's close of $10.56.

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 $165.0 million and is part of the utilities industry. Shares are up 51.7% year-to-date as of the close of trading on Monday.

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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 19.26%.
  • Investors have driven up the company's shares by 98.25% 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, Connecticut Water Service ( CTWS) was down $0.64 (1.9%) to $32.50 on average volume. Throughout the day, 29,252 shares of Connecticut Water Service exchanged hands as compared to its average daily volume of 23,900 shares. The stock ranged in price between $32.50-$33.13 after having opened the day at $32.94 as compared to the previous trading day's close of $33.14.

Connecticut Water Service, Inc., through its subsidiaries, operates as a regulated water company. The company operates in three segments: Water Activities, Real Estate Transactions, and Services and Rentals. The Water Activities segment supplies public drinking water. Connecticut Water Service has a market cap of $365.4 million and is part of the utilities industry. Shares are down 6.7% year-to-date as of the close of trading on Monday. Currently there are 4 analysts who rate Connecticut Water Service a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Connecticut Water Service 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on CTWS go as follows:

  • CTWS's revenue growth has slightly outpaced the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 12.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
  • CONNECTICUT WATER SVC INC reported significant earnings per share improvement 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, CONNECTICUT WATER SVC INC increased its bottom line by earning $1.66 versus $1.52 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.66).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Water Utilities industry. The net income increased by 73.8% when compared to the same quarter one year prior, rising from $4.31 million to $7.49 million.
  • The gross profit margin for CONNECTICUT WATER SVC INC is rather high; currently it is at 50.89%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.41% significantly outperformed against the industry average.

You can view the full analysis from the report here: Connecticut Water Service 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 $0.01 (2.0%) to $0.56 on light volume. Throughout the day, 85,206 shares of U S Geothermal exchanged hands as compared to its average daily volume of 377,700 shares. The stock ranged in price between $0.55-$0.57 after having opened the day at $0.55 as compared to the previous trading day's close of $0.57.

U S Geothermal has a market cap of $57.1 million and is part of the utilities industry. Shares are up 45.1% year-to-date as of the close of trading on Monday. 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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