3 Rallying Utilities With Strong Receivable Trends

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 |  Includes: PNG, TRP, YORW
by: Kapitall

Do you consider a stock's sales trends when choosing among names? Sales are often the primary source of profits, so a sales analysis should be high on your checklist. To illustrate, we ran a screen.

We began by screening the utilities sector for stocks with strong upward momentum, rallying above their 20-day, 50-day, and 200-day moving averages.

We then screened for those stocks with strong sales trends, comparing growth in revenue to growth in accounts receivable. Since accounts receivable is the portion of revenue not yet received, and there is no guarantee the money will ever be received, the smaller the portion of revenue made up of receivables the healthier the company's revenue.

We screened for stocks seeing faster growth in revenue than accounts receivable year-over-year, as well as accounts receivable comprising a smaller portion of current assets over the same time period.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

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Do you think these names will continue to rally higher? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

1. PAA Natural Gas Storage, L.P. (PNG): Engages in the acquisition, development, operation, and commercial management of natural gas storage facilities. Market cap at $1.08B, most recent closing price at $18.33. The stock is trading 1.62% above its 20-day moving average, 2.73% above its 50-day MA, and 3.08% above its 200-day MA. Revenue grew by 115.63% during the most recent quarter ($108.72M vs. $50.42M y/y). Accounts receivable grew by -34.57% during the same time period ($18.15M vs. $27.74M y/y). Receivables, as a percentage of current assets, decreased from 74.99% to 29.43% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

2. TransCanada Corp. (TRP): Operates as an energy infrastructure company in North America. Market cap at $30.68B, most recent closing price at $44.18. The stock is trading 3.99% above its 20-day moving average, 6.62% above its 50-day MA, and 6.84% above its 200-day MA. Revenue grew by 2.3% during the most recent quarter ($1,911M vs. $1,868M y/y). Accounts receivable grew by -14.91% during the same time period ($1,067M vs. $1,254M y/y). Receivables, as a percentage of current assets, decreased from 44.25% to 38.98% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

3. York Water Co. (YORW): Engages in impounding, purifying, and distributing drinking water in Pennsylvania. Market cap at $229.53M, most recent closing price at $18.02. The stock is trading 0.24% above its 20-day moving average, 3.31% above its 50-day MA, and 4.89% above its 200-day MA. Revenue grew by 0.31% during the most recent quarter ($9.67M vs. $9.64M y/y). Accounts receivable grew by -13.08% during the same time period ($3.39M vs. $3.9M y/y). Receivables, as a percentage of current assets, decreased from 38.54% to 30.76% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.