Trade-Ideas: Empire District Electric (EDE) Is Today's Strong On High Relative Volume Stock

Trade-Ideas LLC identified Empire District Electric ( EDE) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Empire District Electric as such a stock due to the following factors:

  • EDE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.9 million.
  • EDE has traded 511,314 shares today.
  • EDE is trading at 31.10 times the normal volume for the stock at this time of day.
  • EDE is trading at a new high 16.34% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 EDE:

The Empire District Electric Company, together with its subsidiaries, generates, purchases, transmits, distributes, and sells electricity in Missouri, Kansas, Oklahoma, and Arkansas. It operates in three segments: Electric, Gas, and Other. The stock currently has a dividend yield of 4.5%. EDE has a PE ratio of 21. Currently there are 2 analysts that rate Empire District Electric a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Empire District Electric has been 209,400 shares per day over the past 30 days. Empire District Electric has a market cap of $1.0 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.47 and a short float of 2.6% with 4.99 days to cover. Shares are down 23.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Empire District Electric as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. 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 net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Electric Utilities industry average. The net income increased by 5.8% when compared to the same quarter one year prior, going from $23.89 million to $25.29 million.
  • Net operating cash flow has increased to $71.59 million or 34.24% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.89%.
  • 42.26% is the gross profit margin for EMPIRE DISTRICT ELECTRIC CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.89% trails the industry average.
  • EMPIRE DISTRICT ELECTRIC CO has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, EMPIRE DISTRICT ELECTRIC CO increased its bottom line by earning $1.55 versus $1.48 in the prior year. For the next year, the market is expecting a contraction of 10.3% in earnings ($1.39 versus $1.55).
  • EDE, with its decline in revenue, slightly underperformed the industry average of 0.8%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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