Trade-Ideas LLC identified

Airgas

(

ARG

) 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 Airgas as such a stock due to the following factors:

  • ARG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $251.9 million.
  • ARG has traded 520,967 shares today.
  • ARG traded in a range 211.2% of the normal price range with a price range of $1.08.
  • ARG traded above its daily resistance level (quality: 8 days, meaning that the stock is crossing a resistance level set by the last 8 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.

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More details on ARG:

Airgas, Inc., together with its subsidiaries, supplies industrial, medical, and specialty gases; and welding equipment and related products. It operates through two segments, Distribution and All Other Operations. The stock currently has a dividend yield of 1.8%. ARG has a PE ratio of 28. Currently there are no analysts that rate Airgas a buy, 2 analysts rate it a sell, and 10 rate it a hold.

The average volume for Airgas has been 1.3 million shares per day over the past 30 days. Airgas has a market cap of $9.8 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.87 and a short float of 2.5% with 0.82 days to cover. Shares are up 18.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Airgas as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.1%. Since the same quarter one year prior, revenues slightly increased by 1.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • AIRGAS INC reported flat earnings per share in the most recent quarter. 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, AIRGAS INC increased its bottom line by earning $4.86 versus $4.68 in the prior year. This year, the market expects an improvement in earnings ($4.90 versus $4.86).
  • The gross profit margin for AIRGAS INC is rather high; currently it is at 56.24%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.13% trails the industry average.
  • Net operating cash flow has slightly increased to $147.92 million or 2.05% when compared to the same quarter last year. Despite an increase in cash flow, AIRGAS INC's cash flow growth rate is still lower than the industry average growth rate of 13.70%.

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