CMS Energy Corporation (CMS) Insiders Knew Better, But Did Investors Listen?

CMS Energy Corporation (NYSE:CMS) has been downgraded by BofA/Merrill on October 12 which now rates the stock as Neutral compared with Buy rating suggested in the past. Analysts at Argus, shed their negative views on September 10 by lifting it fromHold to Buy. Analysts at Citigroup, made their first call about the stock on April 13, recommending it is Neutral. Hilliard Lyons analysts came out with bullish views on February 15 when the call was made. They think the stock is now Long-term Buy compared to to their prior call for Neutral.

CMS Energy Corporation (CMS) hit an intraday high Thursday at $52.99. The shares finished at $52.91, after trading as low as $51.64 earlier in the session. It rose 0.65% in recent trade and currently has a stock-market value of $14.95B. Trading activity significantly improved as the volume at ready counter increased to 3,403,160 shares versus 2,530,285 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 2,680,160 shares. The stock is now 30.71% above against its bear-market low of $40.48 on February 09, 2018. It has retreated -0.83% since it’s 52-week high of $53.35 reached in December. Now the market price is up 7.3% on the year and up 11.86% YTD.

CMS’s 50 day simple moving average (SMA 50) price is $50.15 and its 200-day simple moving average (SMA 200) price is $47.27. The company’s stock currently has a total float of 281.44M shares. Its weekly volatility is hovering around 1.95% and felt 1.61% volatility in price over a month. On the upside, the share price will test short term resistance at around $53.39. On a downside, the stock is likely to find some support, which begins at $52.04. The failure to get near-term support could push it to $51.16.

Separately, it has been reported that multiple insider activity took place at CMS Energy Corporation (CMS). Senior Vice President Hofmeister Brandon J. sold 500 shares for $16,298 in transaction occurred on 2018/11/20. After making this transaction, the Senior Vice President owns a direct stake of 25,940 shares, worth $862,327, as per the last closing price. On 2018/10/30 Rich Brian F, SVP and CIO at CMS, dumped 4,000 shares at an average price of $49.69 per share. The selling total is valued at $2,852,854.

Senior Vice President, Venkat Dhenuvakonda Rao had divested 1,000 shares for $29,841 through a trade on 2018/08/14. Following this activity, the insider holds 48,770 shares worth $1,578,887 as of recent close. Wall Street’s most bullish CMS Energy Corporation (NYSE:CMS) analysts are predicting the share price to blow past $55 per share during the next 12 months. The current median share price forecast by them is $51, suggesting that the stock could increase -3.61% in that time frame. The average price target of $51.09 calls for a nearly -3.44% increase in the stock price.

When looking at valuations, CMS Energy Corporation (CMS) has a cheap P/E of 21.53x as compared to industry average of 22.8x. Moreover, it trades for 21.16 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 3.15x price/book and 2.19x price/sales. Compared to others, CMS Energy Corporation is in a different league with regards to profitability, having net margins of 8%. To put some perspective around this, the industry’s average net margin is 38.45%. CMS’s ROE is 11.8%, which is also considerably worse than the industry’s ROE of 12.04%. It’s also not liquid in the near term, with a current ratio of 0.7. The stock has a debt/capital of 2.36.

Shares of CMS Energy Corporation (CMS) have gained 1.7% since the company’s last earnings report. Over the past 12 fiscal quarters, CMS Energy Corporation (NYSE:CMS) has topped consensus earnings estimates in 7 quarters (58%), missed earnings in 2 quarters (16%), whereas at 3 occasion EPS met analyst expectations. CMS last reported earnings on October 25, 2018 when it released Sep-18 results that exceeded expectations. The company raked in $0.59 per share, -76.4% change on the same period last year. That was better than consensus for $0.58. Revenue for the recent quarter stood at $1.6 billion, up 5% on last year and above the $1.56 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $1.33 billion to $1.74 billion, which should be compared with $1.62 billion generated last year. EPS is seen in a range of $0.39 to $0.44, against the $0.53 reported a year ago.