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 OGE Energy ( OGE) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified OGE Energy as such a stock due to the following factors:

  • OGE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.6 million.
  • OGE has traded 756,952 shares today.
  • OGE traded in a range 203% of the normal price range with a price range of $1.28.
  • OGE traded below its daily resistance level (quality: 312 days, meaning that the stock is crossing a resistance level set by the last 312 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on OGE:

OGE Energy Corp., together with its subsidiaries, operates as an energy and energy services provider that offers physical delivery and related services for electricity and natural gas primarily in the south central United States. The stock currently has a dividend yield of 2.9%. OGE has a PE ratio of 17.7. Currently there are 7 analysts that rate OGE Energy a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for OGE Energy has been 1.2 million shares per day over the past 30 days. OGE Energy has a market cap of $6.9 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.56 and a short float of 0.4% with 0.56 days to cover. Shares are up 2.8% 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 OGE Energy as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 42.37% is the gross profit margin for OGE ENERGY CORP which we consider to be strong. Regardless of OGE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OGE's net profit margin of 24.81% significantly outperformed against the industry.
  • Net operating cash flow has slightly increased to $284.70 million or 4.93% when compared to the same quarter last year. Despite an increase in cash flow, OGE ENERGY CORP's cash flow growth rate is still lower than the industry average growth rate of 19.74%.
  • The debt-to-equity ratio is somewhat low, currently at 0.90, 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 0.28 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • OGE ENERGY CORP's earnings per share declined by 13.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, OGE ENERGY CORP increased its bottom line by earning $1.95 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($1.97 versus $1.95).

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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