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FMC Corporation (FMC) Showing Signs Of Being Water-Logged And Getting Wetter

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 Corporation ( FMC) 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 FMC Corporation as such a stock due to the following factors:

  • FMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.6 million.
  • FMC has traded 146,229 shares today.
  • FMC traded in a range 367.2% of the normal price range with a price range of $3.70.
  • FMC traded below its daily resistance level (quality: 70 days, meaning that the stock is crossing a resistance level set by the last 70 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 FMC:

FMC Corporation, a diversified chemical company, provides solutions, applications, and products for agricultural, industrial, environmental, and consumer markets. It operates in three segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Minerals. The stock currently has a dividend yield of 0.8%. FMC has a PE ratio of 22.9. Currently there are 4 analysts that rate FMC Corporation a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for FMC Corporation has been 1.0 million shares per day over the past 30 days. FMC has a market cap of $10.1 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.24 and a short float of 3.2% with 6.17 days to cover. Shares are up 0.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates FMC Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 23.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FMC CORP has improved earnings per share by 25.0% 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 two years. We feel that this trend should continue. During the past fiscal year, FMC CORP increased its bottom line by earning $3.31 versus $3.20 in the prior year. This year, the market expects an improvement in earnings ($4.48 versus $3.31).
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 31.43% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Chemicals industry and the overall market, FMC CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for FMC CORP is currently lower than what is desirable, coming in at 34.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.39% significantly trails the industry average.

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