Tread Carefully When It Comes To Companhia Energetica de Minas Gerais (CIG)

Despite closing -0.06 points lower on 06 December, Companhia Energetica de Minas Gerais (NYSE:CIG) remains a key investment for many, but the stock is also a popular trading vehicle. Here’s how to trade it using charts and trading levels Friday. The shares dropped -1.88 percent at $3.13 with a light trade volume of 4.372 million shares. After opening the session at $3.07, the shares went as high as $3.15 and as low as $3.01, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $4.64 billion and now has 1.48 billion shares outstanding. Companhia Energetica de Minas Gerais (CIG) stock has gained 2.62 percent of market value in 21 trading days.

CIG stock has a trailing 3-year beta of 0.46, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.22 a share in the trailing twelve months. The stock’s value has surged 51.94 percent year to date (YTD) against a rise of 51.53 percent in 12 month’s time. The company’s shares still trade -5.15 percent away from its 1-year high of $3.30 and 100.64 percent up from 52-week low of $1.56. The average consensus rating on the company is 2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Companhia Energetica de Minas Gerais (CIG) will probably climb -3.19 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $4.12-month high price target. This represents a whopping 31.63 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $3.29, which represents a return potential of 5.11 percent when compared to the closing price of the stock of $3.13 on Thursday, December 06. The lowest price target for the stock is $2.12 — slightly more than -32.27 percent from CIG’s current share price.

History has shown that shares in Companhia Energetica de Minas Gerais have gone up on 5 different earnings reaction days and are predicted to add 0.01 percent when the company reports upcoming earnings. Investors will get their next glimpse of CIG’s Q4 earnings on March 28. Analysts are forecasting revenue to suffer decline of -14 percent to $1.74B in the fiscal fourth quarter, while earnings are seen soaring by nearly -100 percent to $0 per share. It earned $0.02 per share, worse than the $0.07, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.53B, better than the $1.49B analysts expected. Earnings are estimated to increase by 199.3 percent this year, 34.4 percent next year and continue to increase by 0 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $3.04. Below this, the next support is placed in the zone of $2.96. Till the time, the CIG stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 54.79 on daily chart, which may remain a cause for concern. If the price breaks below $2.96 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $3.18 mark may result into a pull-back move towards $3.24 level.

Shares of Companhia Energetica de Minas Gerais (CIG) are trading at a P/E ratio of 16.73 times earnings reported for the past 12 months. The industry CIG operates in has an average P/E of 13.23. Its P/E ratio went as low as 3.03X and as high as 27.92 over the 5-year span.Further, it is sporting a 0.77 on the Price-to-Sales ratio. Compare this with the industry average P/S of 2.19. 20.1 percent is the gross profit margin for Companhia Energetica de Minas Gerais and operating margin sits at 13.7 percent. Along with this, the net profit margin is 4.8 percent.