Storm The Castle Stock Of The Day: Exelon (EXC)

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 Exelon ( EXC) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Exelon as such a stock due to the following factors:

  • EXC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $207.0 million.
  • EXC has traded 4.8 million shares today.
  • EXC is trading at 1.64 times the normal volume for the stock at this time of day.
  • EXC crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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.

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More details on EXC:

Exelon Corporation, a utility services holding company, engages in the energy generation and delivery businesses in the United States. It owns electric generating facilities, such as nuclear, fossil, and hydroelectric generation facilities, as well as wind and solar photovoltaic facilities. The stock currently has a dividend yield of 3.8%. EXC has a PE ratio of 13. Currently there are 7 analysts that rate Exelon a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Exelon has been 7.0 million shares per day over the past 30 days. Exelon has a market cap of $28.5 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.37 and a short float of 9.2% with 12.77 days to cover. Shares are down 9.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Exelon as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, notable return on equity and impressive record of earnings per share 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:
  • The revenue growth came in higher than the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 22.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 670.0% when compared to the same quarter one year prior, rising from $90.00 million to $693.00 million.
  • Net operating cash flow has significantly increased by 803.03% to $1,490.00 million when compared to the same quarter last year. In addition, EXELON CORP has also vastly surpassed the industry average cash flow growth rate of -25.99%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, EXELON CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • EXELON CORP reported significant earnings per share improvement 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, EXELON CORP reported lower earnings of $1.87 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($2.45 versus $1.87).

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