Trade-Ideas: Huntsman Corporation (HUN) Is Today's Momo Momentum Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Huntsman Corporation (HUN) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Huntsman Corporation as such a stock due to the following factors:
- HUN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $174.8 million.
- HUN has a PE ratio of 49.0.
- HUN is currently in the upper 30% of its 1-year range.
- HUN is in the upper 25% of its 20-day range.
- HUN is in the upper 35% of its 5-day range.
- HUN is currently trading above yesterday's high.
- HUN has experienced a gap between today's open and yesterday's close of 0%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.EXCLUSIVE OFFER: Get the inside scoop on opportunities in HUN with the Ticky from Trade-Ideas. See the FREE profile for HUN NOW at Trade-IdeasMore details on HUN: Huntsman Corporation and its subsidiaries engage in the manufacture and sale of differentiated organic and inorganic chemical products worldwide. The company operates in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments. The stock currently has a dividend yield of 2.4%. HUN has a PE ratio of 49.0. Currently there are 5 analysts that rate Huntsman Corporation a buy, 1 analyst rates it a sell, and 3 rate it a hold.The average volume for Huntsman Corporation has been 3.3 million shares per day over the past 30 days. Huntsman has a market cap of $5.0 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 2.57 and a short float of 1.8% with 0.47 days to cover. Shares are up 29.4% year to date as of the close of trading on Wednesday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Huntsman Corporation as a buy. Among the primary strengths of the company is its solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- Compared to its closing price of one year ago, HUN's share price has jumped by 28.82%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- HUNTSMAN CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HUNTSMAN CORP increased its bottom line by earning $1.53 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.53).
- HUN, with its decline in revenue, slightly underperformed the industry average of 2.7%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The debt-to-equity ratio is very high at 2.21 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, HUN maintains a poor quick ratio of 0.91, which illustrates the inability to avoid short-term cash problems.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Chemicals industry and the overall market, HUNTSMAN CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full Huntsman Corporation Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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