Enbridge (ENB) Is Today's Perilous Reversal 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 Enbridge ( ENB) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Enbridge as such a stock due to the following factors:

  • ENB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.3 million.
  • ENB has traded 463,264 shares today.
  • ENB is down 3% today.
  • ENB was up 10.3% yesterday.

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More details on ENB:

Enbridge Inc. operates as an energy transportation and distribution company in the United States and Canada. Its Liquids Pipelines segment operates common carrier and contract crude oil, natural gas liquids (NGL), and refined products pipelines and terminals. The stock currently has a dividend yield of 2.7%. ENB has a PE ratio of 58.4. Currently there are 3 analysts that rate Enbridge a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Enbridge has been 1.1 million shares per day over the past 30 days. Enbridge has a market cap of $39.2 billion and is part of the basic materials sector and energy industry. Shares are up 9.6% 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 Enbridge as a hold. Among the primary strengths of the company is its solid stock performance, considering both the consistency and magnitude of the price movement over time. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and generally higher debt management risk.

Highlights from the ratings report include:
  • ENB, with its decline in revenue, slightly underperformed the industry average of 6.4%. Since the same quarter one year prior, revenues slightly dropped by 7.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • ENBRIDGE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ENBRIDGE INC reported lower earnings of $0.55 versus $0.87 in the prior year.
  • The gross profit margin for ENBRIDGE INC is currently extremely low, coming in at 9.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.16% trails that of the industry average.
  • Net operating cash flow has decreased to $746.00 million or 10.12% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ENBRIDGE INC has marginally lower results.

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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