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Axiall (AXLL) Is Water-Logged And Getting Wetter Today

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 Axiall ( AXLL) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Axiall as such a stock due to the following factors:

  • AXLL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.1 million.
  • AXLL has traded 1.7 million shares today.
  • AXLL traded in a range 258.5% of the normal price range with a price range of $3.40.
  • AXLL traded below its daily resistance level (quality: 45 days, meaning that the stock is crossing a resistance level set by the last 45 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on AXLL:

Axiall Corporation manufactures and markets chemicals and building products in North America. The company operates through three segments: Chlorovinyls, Building Products, and Aromatics. The stock currently has a dividend yield of 1.4%. AXLL has a PE ratio of 18.9. Currently there are 4 analysts that rate Axiall a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Axiall has been 1.0 million shares per day over the past 30 days. Axiall has a market cap of $3.2 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 2.98 and a short float of 5% with 3.64 days to cover. Shares are down 2% year-to-date as of the close of trading on Monday.

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 Axiall as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 44.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.32, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 76.5% when compared to the same quarter one year prior, rising from $32.29 million to $57.00 million.
  • Net operating cash flow has slightly increased to $169.70 million or 2.51% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -36.77%.
  • AXIALL CORP's earnings per share declined by 11.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, AXIALL CORP reported lower earnings of $2.33 versus $3.44 in the prior year. This year, the market expects an improvement in earnings ($3.20 versus $2.33).

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