Barbarian At The Gate: Atmos Energy (ATO)

Trade-Ideas LLC identified Atmos Energy ( ATO) 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 Atmos Energy as such a stock due to the following factors:

  • ATO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.9 million.
  • ATO has traded 108,595 shares today.
  • ATO traded in a range 219.4% of the normal price range with a price range of $1.86.
  • ATO traded above its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ATO with the Ticky from Trade-Ideas. See the FREE profile for ATO NOW at Trade-Ideas

More details on ATO:

Atmos Energy Corporation, together with its subsidiaries, engages in the distribution, transmission, and storage of natural gas in the United States. It operates in three segments: Regulated Distribution, Regulated Pipeline, and Nonregulated. The stock currently has a dividend yield of 2.1%. ATO has a PE ratio of 25. Currently there are 5 analysts that rate Atmos Energy a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Atmos Energy has been 515,100 shares per day over the past 30 days. Atmos Energy has a market cap of $8.1 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.25 and a short float of 2.2% with 6.00 days to cover. Shares are up 26.6% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Atmos Energy as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 45.87% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ATO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Gas Utilities industry average. The net income increased by 3.0% when compared to the same quarter one year prior, going from $137.68 million to $141.81 million.
  • ATMOS ENERGY CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ATMOS ENERGY CORP increased its bottom line by earning $3.09 versus $3.01 in the prior year. This year, the market expects an improvement in earnings ($3.30 versus $3.09).
  • The debt-to-equity ratio is somewhat low, currently at 0.92, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.33 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • ATO, with its decline in revenue, slightly underperformed the industry average of 20.0%. Since the same quarter one year prior, revenues fell by 26.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

State Street Gets Pummeled on Software Deal; Pizza Wars Are Raging -- ICYMI

State Street Gets Pummeled on Software Deal; Pizza Wars Are Raging -- ICYMI

Schlumberger Stock Dips as Investors Ignore Start of 'Earnings Liftoff'

Schlumberger Stock Dips as Investors Ignore Start of 'Earnings Liftoff'

GSK Shares Climb as Board Is Said to Mull Breakup of Pharma Giant

GSK Shares Climb as Board Is Said to Mull Breakup of Pharma Giant

Stocks End Close to Home

Stocks End Close to Home

Jim Cramer on Bank of America, Tariffs and the Goldman Sachs CEO Change

Jim Cramer on Bank of America, Tariffs and the Goldman Sachs CEO Change