Today's Water-Logged And Getting Wetter Stock: CMS Energy (CMS)

Trade-Ideas LLC identified CMS Energy ( CMS) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified CMS Energy as such a stock due to the following factors:

  • CMS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $70.4 million.
  • CMS has traded 546,038 shares today.
  • CMS traded in a range 205.7% of the normal price range with a price range of $1.22.
  • CMS traded below its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on CMS:

CMS Energy Corporation operates as an energy company primarily in Michigan. It operates through three segments: Electric Utility, Gas Utility, and Enterprises. The stock currently has a dividend yield of 2.8%. CMS has a PE ratio of 24. Currently there are 2 analysts that rate CMS Energy a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for CMS Energy has been 2.0 million shares per day over the past 30 days. CMS Energy has a market cap of $12.2 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.19 and a short float of 3% with 5.06 days to cover. Shares are up 21.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CMS Energy as a buy. Among the primary strengths of the company is its solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, CMS's share price has jumped by 36.76%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • CMS ENERGY CORP's earnings per share declined by 19.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CMS ENERGY CORP increased its bottom line by earning $1.89 versus $1.74 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $1.89).
  • CMS, with its decline in revenue, slightly underperformed the industry average of 9.7%. Since the same quarter one year prior, revenues fell by 14.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for CMS ENERGY CORP is currently lower than what is desirable, coming in at 31.87%. Regardless of CMS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.10% trails the industry average.
  • 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. Compared to other companies in the Multi-Utilities industry and the overall market on the basis of return on equity, CMS ENERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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