Trade-Ideas LLC identified Energy Company of Parana ( ELP) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Energy Company of Parana as such a stock due to the following factors:

  • ELP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.0 million.
  • ELP has traded 109,138 shares today.
  • ELP is trading at 2.76 times the normal volume for the stock at this time of day.
  • ELP is trading at a new low 7.04% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 ELP:

Companhia Paranaense de Energia - COPEL engages in the generation, transmission, distribution, and sale of electricity to industrial, residential, commercial, rural, and other customers primarily in the State of Parana, Brazil. The stock currently has a dividend yield of 10.8%. Currently there is 1 analyst that rates Energy Company of Parana a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Energy Company of Parana has been 447,600 shares per day over the past 30 days. Energy Company of Parana has a market cap of $2.0 billion and is part of the utilities sector and utilities industry. Shares are up 24.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Energy Company of Parana as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • 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 71.1% when compared to the same quarter one year prior, rising from $58.31 million to $99.78 million.
  • The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
  • The revenue fell significantly faster than the industry average of 6.8%. Since the same quarter one year prior, revenues fell by 39.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ELP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 35.83%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Electric Utilities industry and the overall market, COPEL-CIA PARANAENSE ENERGIA's return on equity is below that of both the industry average and the S&P 500.

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