Trade-Ideas: Questar (STR) Is Today's

Trade-Ideas LLC identified Questar ( STR) 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 Questar as such a stock due to the following factors:

  • STR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.0 million.
  • STR has traded 3.9 million shares today.
  • STR traded in a range 248.6% of the normal price range with a price range of $0.40.
  • STR traded above its daily resistance level (quality: 61 days, meaning that the stock is crossing a resistance level set by the last 61 calendar days. 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 STR:

Questar Corporation operates as an integrated natural gas company in the United States. The stock currently has a dividend yield of 3.5%. STR has a PE ratio of 21. Currently there are no analysts that rate Questar a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Questar has been 3.0 million shares per day over the past 30 days. Questar has a market cap of $4.4 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.43 and a short float of 2.7% with 1.41 days to cover. Shares are up 27.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Questar as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and generally higher debt management risk.

Highlights from the ratings report include:
  • After a year of stock price fluctuations, the net result is that STR's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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, STR has outperformed against the industry average of 24.2%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 the Gas Utilities industry average. The net income has decreased by 18.6% when compared to the same quarter one year ago, dropping from $62.50 million to $50.90 million.
  • Net operating cash flow has decreased to $47.40 million or 41.55% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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