EQT (EQT) Flagged As A Storm The Castle Stock

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 EQT ( EQT) 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 EQT as such a stock due to the following factors:

  • EQT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $203.2 million.
  • EQT has traded 2.0 million shares today.
  • EQT is trading at 1.55 times the normal volume for the stock at this time of day.
  • EQT 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 EQT:

EQT Corporation, together with its subsidiaries, operates as a natural gas company in the United States. It operates in two segments, EQT Production and EQT Midstream. The stock currently has a dividend yield of 0.1%. EQT has a PE ratio of 30.5. Currently there are 12 analysts that rate EQT a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for EQT has been 1.4 million shares per day over the past 30 days. EQT has a market cap of $14.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.88 and a short float of 3.6% with 2.36 days to cover. Shares are up 8.1% year-to-date as of the close of trading on Wednesday.

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 EQT as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 20.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.68, 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 this, the company maintains a quick ratio of 2.77, which clearly demonstrates the ability to cover short-term cash needs.
  • EQT CORP has improved earnings per share by 8.3% 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 year. We feel that this trend should continue. During the past fiscal year, EQT CORP increased its bottom line by earning $1.97 versus $1.22 in the prior year. This year, the market expects an improvement in earnings ($3.19 versus $1.97).
  • The gross profit margin for EQT CORP is currently very high, coming in at 70.34%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.02% significantly outperformed against the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 11.7% when compared to the same quarter one year prior, going from $88.26 million to $98.56 million.

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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