Idacorp (IDA) Stock Is a Stealth Utility Play

NEW YORK (TheStreet) -- Here's another long idea entirely based on the chart picture: Idacorp  (IDA) , a holding company whose primary subsidiary is Idaho Power, an electric utility.

IDA made a peak at $70 a share, chart above, and then corrected down to $56. From this low, IDA rallied to $64 before another decline to a higher low of $58. From this recent low, IDA has rallied back to $64. A close above $65 will give us a higher high and establish an uptrend that we want to join.

This longer-term view, above, of IDA shows how the stock has doubled in recent years, and also shows the recent improvement in the trend following the Moving Average Convergence Divergence oscillator in the bottom panel. This long-term uptrend and the improved technical indicators have us poised to go long. We could wait for another higher low to be established or go long on a strong close above $65 with increased volume.

Separately, TheStreet Ratings team rates IDACORP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate IDACORP INC (IDA) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, compelling growth in net income, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • IDA's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 5.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 35.77% is the gross profit margin for IDACORP INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.64% is above that of the industry average.
  • 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 48.4% when compared to the same quarter one year prior, rising from $44.54 million to $66.08 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.89, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
  • You can view the full analysis from the report here: IDA

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