Pepco Holdings (POM) Is Weak On High Volume Today

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.

Trade-Ideas LLC identified Pepco Holdings ( POM) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Pepco Holdings as such a stock due to the following factors:

  • POM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.0 million.
  • POM has traded 967,228 shares today.
  • POM is trading at 3.41 times the normal volume for the stock at this time of day.
  • POM is trading at a new low 3.00% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in POM with the Ticky from Trade-Ideas. See the FREE profile for POM NOW at Trade-Ideas

More details on POM:

Pepco Holdings, Inc., through its subsidiaries, engages in the transmission, distribution, and supply of electricity. The company also distributes and supplies natural gas. The stock currently has a dividend yield of 4.1%. POM has a PE ratio of 30.0. Currently there are no analysts that rate Pepco Holdings a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Pepco Holdings has been 1.3 million shares per day over the past 30 days. Pepco has a market cap of $6.6 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.24 and a short float of 1.4% with 2.19 days to cover. Shares are down 3% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pepco Holdings as a buy. Among the primary strengths of the company is its revenue growth. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • POM's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 3.1%. 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.
  • PEPCO HOLDINGS INC's earnings per share declined by 30.0% 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, PEPCO HOLDINGS INC increased its bottom line by earning $0.96 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $0.96).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Electric Utilities industry average. The net income has significantly decreased by 29.3% when compared to the same quarter one year ago, falling from $75.00 million to $53.00 million.
  • In its most recent trading session, POM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
  • The debt-to-equity ratio of 1.36 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, POM has a quick ratio of 0.53, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Canopy Growth Lets Down Eager Pot Investors; PayPal Keeps Dominating -- ICYMI

Canopy Growth Lets Down Eager Pot Investors; PayPal Keeps Dominating -- ICYMI

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

3 Must Reads on the Market From TheStreet's Top Columnists

3 Must Reads on the Market From TheStreet's Top Columnists

Automakers Slump as Trump Tariffs Threaten Both Manufacturers and Consumers

Automakers Slump as Trump Tariffs Threaten Both Manufacturers and Consumers