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Trade-Ideas: FMC Technologies (FTI) Is Today's "Barbarian At The Gate" 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 FMC Technologies ( FTI) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified FMC Technologies as such a stock due to the following factors:

  • FTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $125.9 million.
  • FTI has traded 99,150 shares today.
  • FTI traded in a range 283.7% of the normal price range with a price range of $2.89.
  • FTI traded above its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in FTI with the Ticky from Trade-Ideas. See the FREE profile for FTI NOW at Trade-Ideas

More details on FTI:

FMC Technologies, Inc. provides technology solutions for the energy industry worldwide. FTI has a PE ratio of 26.9. Currently there are 17 analysts that rate FMC Technologies a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for FMC Technologies has been 1.9 million shares per day over the past 30 days. FMC has a market cap of $11.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.08 and a short float of 4.7% with 3.55 days to cover. Shares are down 5.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates FMC Technologies as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, good cash flow from operations, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 21.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FMC TECHNOLOGIES INC has improved earnings per share by 19.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, FMC TECHNOLOGIES INC increased its bottom line by earning $1.78 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($2.09 versus $1.78).
  • Net operating cash flow has increased to $153.60 million or 47.26% when compared to the same quarter last year. In addition, FMC TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of -70.99%.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Energy Equipment & Services industry average. The net income increased by 17.3% when compared to the same quarter one year prior, going from $98.90 million to $116.00 million.
  • FTI's debt-to-equity ratio of 0.76 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.01 is sturdy.

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