Strong And Under The Radar Today: WGL Holdings (WGL)

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 WGL Holdings ( WGL) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified WGL Holdings as such a stock due to the following factors:

  • WGL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.9 million.
  • WGL is making at least a new 3-day high.
  • WGL has a PE ratio of 151.6.
  • WGL is mentioned 0.87 times per day on StockTwits.
  • WGL has not yet been mentioned on StockTwits today.
  • WGL is currently in the upper 20% of its 1-year range.
  • WGL is in the upper 35% of its 20-day range.
  • WGL is in the upper 45% of its 5-day range.
  • WGL is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on WGL:

WGL Holdings, Inc., through its subsidiaries, sells and delivers natural gas, and provides energy-related products and services. The company operates in four segments: Regulated Utility, Retail Energy-Marketing, Commercial Energy Systems, and Midstream Energy Services. The stock currently has a dividend yield of 3.7%. WGL has a PE ratio of 151.6. Currently there is 1 analyst that rates WGL Holdings a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for WGL Holdings has been 314,400 shares per day over the past 30 days. WGL has a market cap of $2.4 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.98 and a short float of 8% with 15.29 days to cover. Shares are up 17.9% year-to-date as of the close of trading on Monday.

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 WGL Holdings as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 60.96% to $200.82 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 28.46%.
  • The debt-to-equity ratio is somewhat low, currently at 0.66, 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 0.38 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • WGL HOLDINGS INC's earnings per share declined by 21.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, WGL HOLDINGS INC reported lower earnings of $1.55 versus $2.71 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus $1.55).
  • WGL, with its decline in revenue, underperformed when compared the industry average of 9.2%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for WGL HOLDINGS INC is currently extremely low, coming in at 4.29%. Regardless of WGL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -2.48% trails the industry average.

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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