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

  • CPN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.7 million.
  • CPN has traded 229,206 shares today.
  • CPN traded in a range 226.6% of the normal price range with a price range of $0.87.
  • CPN traded below its daily resistance level (quality: 31 days, meaning that the stock is crossing a resistance level set by the last 31 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 CPN:

Calpine Corporation, a wholesale power generation company, owns and operates natural gas-fired and geothermal power plants in North America. It operates natural gas-fired combustion turbines and renewable geothermal conventional steam turbines. CPN has a PE ratio of 8. Currently there are 6 analysts that rate Calpine a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Calpine has been 3.4 million shares per day over the past 30 days. Calpine has a market cap of $5.0 billion and is part of the utilities sector and utilities industry. The stock has a beta of 1.10 and a short float of 3.7% with 4.69 days to cover. Shares are down 1.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Calpine as a hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 252.94% to $26.00 million when compared to the same quarter last year. In addition, CALPINE CORP has also vastly surpassed the industry average cash flow growth rate of -43.85%.
  • Despite the weak revenue results, CPN has outperformed against the industry average of 13.9%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Independent Power Producers & Energy Traders industry and the overall market, CALPINE CORP's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CALPINE 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, CALPINE CORP reported lower earnings of $0.65 versus $2.35 in the prior year. For the next year, the market is expecting a contraction of 12.3% in earnings ($0.57 versus $0.65).
  • 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 Independent Power Producers & Energy Traders industry. The net income has significantly decreased by 1880.0% when compared to the same quarter one year ago, falling from -$10.00 million to -$198.00 million.

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