New Lifetime High Reached By Northeast Utilities (NU)

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 Northeast Utilities ( NU) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Northeast Utilities as such a stock due to the following factors:

  • NU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $98.1 million.
  • NU has traded 40,907 shares today.
  • NU is trading at a new lifetime high.

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More details on NU:

Northeast Utilities, a public utility company, through its subsidiaries, is engaged in the energy delivery business. The company is involved in generation, transmission, and distribution of electricity; and distribution of natural gas. The stock currently has a dividend yield of 3%. NU has a PE ratio of 21.0. Currently there are 7 analysts that rate Northeast Utilities a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Northeast Utilities has been 1.8 million shares per day over the past 30 days. Northeast Utilities has a market cap of $16.3 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.61 and a short float of 3.3% with 5.47 days to cover. Shares are up 21.1% 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 Northeast Utilities as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • NORTHEAST UTILITIES has improved earnings per share by 12.1% 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, NORTHEAST UTILITIES increased its bottom line by earning $2.48 versus $1.92 in the prior year. This year, the market expects an improvement in earnings ($2.66 versus $2.48).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Electric Utilities industry average. The net income increased by 12.0% when compared to the same quarter one year prior, going from $209.50 million to $234.61 million.
  • Net operating cash flow has increased to $507.35 million or 24.36% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.04%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 25.38% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The debt-to-equity ratio is somewhat low, currently at 0.94, 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 0.34 is very weak and demonstrates a lack of ability to pay short-term obligations.

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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