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 OGE Energy ( OGE) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified OGE Energy as such a stock due to the following factors:

  • OGE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $70.9 million.
  • OGE has traded 1.5 million shares today.
  • OGE is trading at 1.66 times the normal volume for the stock at this time of day.
  • OGE crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 OGE:

OGE Energy Corp., together with its subsidiaries, operates as an energy and energy services provider that offers physical delivery and related services for electricity and natural gas primarily in the south central United States. The stock currently has a dividend yield of 2.9%. OGE has a PE ratio of 16.3. Currently there are 7 analysts that rate OGE Energy a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for OGE Energy has been 1.1 million shares per day over the past 30 days. OGE Energy has a market cap of $6.9 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.64 and a short float of 0.5% with 0.53 days to cover. Shares are up 5% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates OGE Energy as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • OGE ENERGY CORP has improved earnings per share by 8.7% 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, OGE ENERGY CORP increased its bottom line by earning $1.95 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.95).
  • Net operating cash flow has significantly increased by 666.18% to $158.60 million when compared to the same quarter last year. In addition, OGE ENERGY CORP has also vastly surpassed the industry average cash flow growth rate of 1.40%.
  • The debt-to-equity ratio is somewhat low, currently at 0.98, 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 0.18 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, OGE ENERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • OGE, with its decline in revenue, underperformed when compared the industry average of 5.4%. Since the same quarter one year prior, revenues fell by 16.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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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