Technicals Say ALLETE Inc. (ALE) Is Worth Holding

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As of Wednesday close, ALLETE Inc.’s (NYSE:ALE) stock was down -$0.28, moving down -0.42 percent to $65.87. The average number of shares traded per day over the past five days has been 378,060 shares. 4 times new highs have been achieved over the past 5 days, with a $1.84 gain in that time frame. In the last twenty days, the average volume was 383,175, while in the previous 50 days, it was 381,318.

Since last month, ALE stock rose 23.65%. Shares of the company fell to $52.35 on 10/25/22, the lowest level in the past month. A 52-week high of $68.61 was reached on 01/10/22 after having rallying from a 52-week low of $47.77. Since the beginning of this year, ALE’s stock price has dropped by -0.72% or -$0.48, and marked a new high 5 times. However, the stock has declined by -3.99% since its 52-week high.


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Valuation Metrics

Right now, ALLETE Inc. (ALE) has a P/E ratio of about 17.95. The stock’s beta is 0.71. Besides these, the trailing price-to-sales (P/S) ratio of 2.40, the price-to-book (PB) ratio of 1.40.

The latest dividend of $0.65 per share was paid out, remained unchanged from last year’s $0.65. On Thursday February 3 2022, a $0.02 dividend increase was announced.

Financial Health

In the three months ended June 29, ALLETE Inc.’s quick ratio stood at 0.40, while its current ratio was 1.00, showing that the company is not able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending June 29 was 0.62, and the total debt-to-equity ratio was 0.73. On the profitability front, the trailing twelve-month gross margin is 92.40% percent. In the year ended June 29, operating margins totaled 9.70%. Based on annual data, ALE earned $788.0 million in gross profit and brought in $1.42 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 4.10%. Return on equity (ROE) for the past 12 months was 7.80%.

In ALLETE Inc.’s quarter-end financial report for June 29, it reported total debt of $1.65 billion. According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. ALE’s revenue rose 11.05% to $373.1 million during the quarter, while net income inched up to $388.3 million. While analysts expected ALLETE Inc. to report $0.63 quarterly earnings, the actual figure was $0.67 per share, beating the consensus estimate by 6.30%. During the quarter, the company generated $92.8 million in EBITDA. The liabilities of ALLETE Inc. were 3.5 billion at the end of its most recent quarter ended June 29, and its total debt was $2.0 billion. The value of shareholders’ equity is $57.16 million.

Technical Picture

This quick technical analysis looks at ALLETE Inc.’s (ALE) price momentum. With a historical volatility rate of 14.84%, the RSI 9-day stood at 81.83% on 23 November.

With respect to its five-day moving average, the current ALLETE Inc. price is up by +2.87% percent or $1.84. At present, ALE shares trade +22.41% above its 20-day simple moving average and +14.22% percent above its 100-day simple moving average. However, the stock is currently trading approximately +11.38% above its SMA50 and +3.29% above its SMA200.

Stochastic coefficient K was 96.82% and Stochastic coefficient D was 96.46%, while ATR was 1.60. Given the Stochastic reading of 94.84% for the 14-day period, the RSI (14) reading has been calculated as 75.97%. As of today, the MACD Oscillator reading stands at 1.75, while the 14-day reading stands at 4.48.

Analyst Ratings

JP Morgan upgraded its rating on ALLETE Inc. (NYSE: ALE) to a Neutral in a note to investors on November 17, 2022. The analysts firm previously had an Underweight rating on the stock.ALLETE Inc. (ALE) has been rated Hold by analysts. According to 0 brokerage firms, ALE is a sell, and 5 firms recommend it is a Hold. There are 0 analysts who say the stock is underweight. A total of 0 analysts rate ALLETE Inc. stock as buy, with 1 recommending it as overweight.

With a median target price of $61.50, the current consensus forecast for the stock is $50.00 – $66.00. Based on these forecasts, analysts predict ALLETE Inc. (ALE) will achieve an average price target of $59.50.

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