Watch Out: Barbarians At The Gate For Black Hills (BKH)

Trade-Ideas LLC identified Black Hills ( BKH) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Black Hills as such a stock due to the following factors:

  • BKH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.7 million.
  • BKH has traded 464,766 shares today.
  • BKH traded in a range 361% of the normal price range with a price range of $4.76.
  • BKH traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on BKH:

Black Hills Corporation, through its subsidiaries, operates as a diversified energy company in the United States. The stock currently has a dividend yield of 3.2%. Currently there are 4 analysts that rate Black Hills a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Black Hills has been 895,800 shares per day over the past 30 days. Black Hills has a market cap of $2.4 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.86 and a short float of 13.9% with 5.07 days to cover. Shares are up 11.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Black Hills as a hold. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including deteriorating net income, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Compared to where it was trading a year ago, BKH's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Despite the weak revenue results, BKH has outperformed against the industry average of 26.1%. Since the same quarter one year prior, revenues fell by 15.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • BLACK HILLS CORP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BLACK HILLS CORP swung to a loss, reporting -$0.70 versus $2.96 in the prior year. This year, the market expects an improvement in earnings ($2.57 versus -$0.70).
  • The gross profit margin for BLACK HILLS CORP is currently lower than what is desirable, coming in at 34.56%. Regardless of BKH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BKH's net profit margin of -4.46% significantly underperformed when compared to the industry average.
  • 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 Multi-Utilities industry. The net income has significantly decreased by 139.3% when compared to the same quarter one year ago, falling from $36.12 million to -$14.20 million.

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