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.

Trade-Ideas LLC identified

FMC Corporation

(

FMC

) 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 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 $39.5 million.
  • FMC has traded 103,018 shares today.
  • FMC traded in a range 224% of the normal price range with a price range of $1.92.
  • FMC traded above its daily resistance level (quality: 16 days, meaning that the stock is crossing a resistance level set by the last 16 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 FMC:

FMC Corporation, a diversified chemical company, provides solutions, applications, and products for the agricultural, consumer, and industrial markets in North America, Europe, the Middle East, Africa, Latin America, and the Asia Pacific. The stock currently has a dividend yield of 1.4%. FMC has a PE ratio of 27. Currently there are 4 analysts that rate FMC Corporation a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for FMC Corporation has been 933,000 shares per day over the past 30 days. FMC has a market cap of $6.5 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.27 and a short float of 4% with 5.87 days to cover. Shares are down 15% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates FMC Corporation as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and generally higher debt management risk.

Highlights from the ratings report include:

  • FMC, with its decline in revenue, slightly underperformed the industry average of 11.5%. Since the same quarter one year prior, revenues fell by 12.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 41.48% is the gross profit margin for FMC CORP which we consider to be strong. Regardless of FMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FMC's net profit margin of -7.09% significantly underperformed when compared to the industry average.
  • FMC CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FMC CORP reported lower earnings of $2.79 versus $3.31 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $2.79).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 171.3% when compared to the same quarter one year ago, falling from $65.60 million to -$46.80 million.
  • The debt-to-equity ratio of 1.43 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, FMC maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.

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