3 Stocks Pushing The Utilities Sector Lower

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.

The Utilities sector as a whole closed the day down 1.5% versus the S&P 500, which was down 1.3%. Laggards within the Utilities sector included American DG Energy ( ADGE), down 10.3%, Ocean Power Technologies ( OPTT), down 2.6%, Pure Cycle ( PCYO), down 2.8%, Gas Natural ( EGAS), down 5.4% and Transportadora de Gas del Sur ( TGS), down 3.2%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the sector lower today:

Gas Natural ( EGAS) is one of the companies that pushed the Utilities sector lower today. Gas Natural was down $0.55 (5.4%) to $9.65 on heavy volume. Throughout the day, 153,327 shares of Gas Natural exchanged hands as compared to its average daily volume of 30,100 shares. The stock ranged in price between $9.50-$10.20 after having opened the day at $10.19 as compared to the previous trading day's close of $10.20.

Gas Natural Inc. is engaged in the distribution and sale of natural gas to residential, commercial, and industrial customers. It operates through Natural Gas Operations, Marketing and Production Operations, and Pipeline Operations segments. Gas Natural has a market cap of $107.3 million and is part of the energy industry. Shares are down 7.4% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Gas Natural a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Gas Natural as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from TheStreet Ratings analysis on EGAS go as follows:

  • Net operating cash flow has significantly increased by 107.03% to $0.19 million when compared to the same quarter last year. In addition, GAS NATURAL INC has also vastly surpassed the industry average cash flow growth rate of -43.11%.
  • The debt-to-equity ratio is somewhat low, currently at 0.71, 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 0.16 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • EGAS, with its decline in revenue, slightly underperformed the industry average of 7.9%. Since the same quarter one year prior, revenues slightly dropped by 0.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • GAS NATURAL 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GAS NATURAL INC increased its bottom line by earning $0.71 versus $0.48 in the prior year. For the next year, the market is expecting a contraction of 4.2% in earnings ($0.68 versus $0.71).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Gas Utilities industry. The net income has significantly decreased by 47.3% when compared to the same quarter one year ago, falling from -$1.01 million to -$1.48 million.

You can view the full analysis from the report here: Gas Natural Ratings Report

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At the close, Pure Cycle ( PCYO) was down $0.13 (2.8%) to $4.50 on light volume. Throughout the day, 21,812 shares of Pure Cycle exchanged hands as compared to its average daily volume of 60,600 shares. The stock ranged in price between $4.42-$4.68 after having opened the day at $4.68 as compared to the previous trading day's close of $4.63.

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area, the United States. Pure Cycle has a market cap of $108.2 million and is part of the energy industry. Shares are up 15.8% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Pure Cycle a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Pure Cycle as a hold. 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 and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from TheStreet Ratings analysis on PCYO go as follows:

  • The revenue growth greatly exceeded the industry average of 8.4%. Since the same quarter one year prior, revenues rose by 44.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PCYO's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for PURE CYCLE CORP is currently very high, coming in at 78.54%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, PCYO's net profit margin of 1.19% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$0.28 million or 129.75% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PCYO's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.36%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

You can view the full analysis from the report here: Pure Cycle Ratings Report

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Ocean Power Technologies ( OPTT) was another company that pushed the Utilities sector lower today. Ocean Power Technologies was down $0.01 (2.6%) to $0.47 on light volume. Throughout the day, 129,573 shares of Ocean Power Technologies exchanged hands as compared to its average daily volume of 206,500 shares. The stock ranged in price between $0.43-$0.49 after having opened the day at $0.49 as compared to the previous trading day's close of $0.48.

Ocean Power Technologies, Inc. develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves primarily in the United States, Europe, Asia, and Australia. Ocean Power Technologies has a market cap of $8.8 million and is part of the energy industry. Shares are down 24.3% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Ocean Power Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on OPTT go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Electrical Equipment industry. The net income has significantly decreased by 33.6% when compared to the same quarter one year ago, falling from -$3.27 million to -$4.37 million.
  • Net operating cash flow has significantly decreased to -$8.94 million or 162.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • OPTT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 80.17%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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, OCEAN POWER TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • OPTT's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.64, which clearly demonstrates the ability to cover short-term cash needs.

You can view the full analysis from the report here: Ocean Power Technologies Ratings Report

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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