Fuelcell Energy (FCEL): Today's Weak On High Volume 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 Fuelcell Energy ( FCEL) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Fuelcell Energy as such a stock due to the following factors:

  • FCEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.6 million.
  • FCEL has traded 1.2 million shares today.
  • FCEL is trading at 4.08 times the normal volume for the stock at this time of day.
  • FCEL is trading at a new low 7.03% 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 FCEL:

FuelCell Energy, Inc., together with its subsidiaries, designs, manufactures, sells, installs, operates, and services stationary fuel cell power plants for distributed baseload power generation. Currently there are 2 analysts that rate Fuelcell Energy a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Fuelcell Energy has been 5.2 million shares per day over the past 30 days. Fuelcell Energy has a market cap of $536.6 million and is part of the utilities sector and utilities industry. The stock has a beta of 1.21 and a short float of 16.6% with 5.98 days to cover. Shares are up 34% year-to-date as of the close of trading on Thursday.

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 Fuelcell Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow and deteriorating net income.

Highlights from the ratings report include:
  • The gross profit margin for FUELCELL ENERGY INC is currently extremely low, coming in at 11.77%. Regardless of FCEL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, FCEL's net profit margin of -16.16% significantly underperformed when compared to the industry average.
  • Net operating cash flow has decreased to -$15.92 million or 13.78% when compared to the same quarter last year. Despite a decrease in cash flow FUELCELL ENERGY INC is still fairing well by exceeding its industry average cash flow growth rate of -24.97%.
  • The change in net income from the same quarter one year ago has exceeded that of the Electrical Equipment industry average, but is less than that of the S&P 500. The net income has decreased by 24.3% when compared to the same quarter one year ago, dropping from -$5.61 million to -$6.98 million.
  • 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, FUELCELL ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • FCEL, with its decline in revenue, slightly underperformed the industry average of 11.3%. Since the same quarter one year prior, revenues fell by 19.6%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable 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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