Trade-Ideas LLC identified

Armstrong World Industries

(

AWI

) 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 Armstrong World Industries as such a stock due to the following factors:

  • AWI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $55.9 million.
  • AWI has traded 68,782 shares today.
  • AWI traded in a range 233.5% of the normal price range with a price range of $3.32.
  • AWI traded above its daily resistance level (quality: 33 days, meaning that the stock is crossing a resistance level set by the last 33 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 AWI:

TST Recommends

Armstrong World Industries, Inc. designs, manufactures, and sells flooring products and ceiling systems for use primarily in the construction and renovation of residential, commercial, and institutional buildings worldwide. AWI has a PE ratio of 29. Currently there are 3 analysts that rate Armstrong World Industries a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Armstrong World Industries has been 686,100 shares per day over the past 30 days. Armstrong World has a market cap of $2.6 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.27 and a short float of 7.2% with 2.64 days to cover. Shares are down 6.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Armstrong World Industries as a

hold

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • ARMSTRONG WORLD INDUSTRIES has improved earnings per share by 10.4% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, ARMSTRONG WORLD INDUSTRIES increased its bottom line by earning $1.84 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($2.26 versus $1.84).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Building Products industry average. The net income increased by 56.6% when compared to the same quarter one year prior, rising from $18.90 million to $29.60 million.
  • AWI, with its decline in revenue, slightly underperformed the industry average of 3.9%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • In its most recent trading session, AWI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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. In comparison to the other companies in the Building Products industry and the overall market, ARMSTRONG WORLD INDUSTRIES's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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