Keller Grain -

• Atmos Energy Corporation (ATO) is a regulated natural gas distributor with a strong focus on modernizing its network and reducing regulatory lag.
• ATO has a 100% technical “buy” signal and is trading above all its daily moving averages.
• Wall Street analysts and major investing advisory services are bullish, with multiple “Strong Buy” ratings.

Today’s Featured Stock:

Valued at $25.3 billion, Atmos Energy Corporation (ATO), along with its subsidiaries, is engaged in regulated natural gas distribution and storage business. The company serves natural gas distribution customers from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. The company operates miles of transmission and distribution lines as well as miles of interstate pipelines. Atmos Energy’s operating strategy has been focused on modernizing its transmission and distribution network as well as reducing regulatory lag. 

What I’m Watching:

I found today’s Chart of the Day by using Barchart’s powerful screening functions. I sorted for stocks with the highest technical buy signals, superior current momentum in both strength and direction, and a Trend Seeker “buy” signal. I then used Barchart’s Flipchart feature to review the charts for consistent price appreciation. ATO checks those boxes. Since the Trend Seeker signaled a “buy” on April 17, the stock has gained 1.3%.

On the chart, you can note that the stock is trading above all of its daily moving averages and has rising prices on steady volume.

ATO Price vs. Daily Moving Averages:

Barchart Technical Indicators for Atmos:

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

When a stock is trading above all of its daily moving averages and closed within 1.18% of its 52-week high, it won’t take much to hit another new high.

• Atmos has a 100% technical “buy” signal.
• The stock closed at $159.59 on April 23, within 1.18% of its 52-week high
• ATO has a Weighted Alpha of +37.39.
• The stock has gained 35.63% over the past year.
• Trend Seeker “buy” signal intact.
• ATO is trading above its 20, 50 and 100-day moving averages.
• The stock has made 11 new highs and is up 7.37% in the last month.
• The 14-day Relative Strength Index is at 65.71%.
• The technical support level is at $157.82

Follow the Fundamentals:

Note the projected increases in both revenue and earnings.

• Trailing price/earnings (P/E) ratio of 22.30x.
• Forward dividend yield of 2.18%.
• Revenue is expected to grow 13.98% this year and another 12.31% next year.
• Earnings are estimated to increase 5.24% this year and increase again by 8.10% next year.

Analyst and Investor Sentiment on Atmos:

I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping a stock, it’s hard to make money swimming against the tide.

It looks like not only Wall Street analysts, but also many of the popular investing advisory services, are bullish on this stock.

• Wall Street analysts issued 6 “Strong Buy,” 1 “Buy,” and 6 “Hold” opinions on the stock with price targets between $146 and $172.
• Value Line gives the stock its average rating and has a price target of $165 for a 5% gain.
• CFRA’s MarketScope gives the stock a “Buy” rating and also has a price target of $165.
• MorningStar thinks the stock is 16% overvalued mainly because its recent price has driven up the P/E ratio.
• 12,940 investors monitor the stock on Seeking Alpha, which rates the stock a “Hold.”

The Bottom Line:

Currently Atmos has market momentum, but it will have a hard time taking market share from much bigger rivals like Cheniere Energy (LNG).

Additional disclosure: The Barchart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance and reevaluate your stop losses at least on a weekly basis.