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

Dow Chemical

(

DOW

) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Dow Chemical as such a stock due to the following factors:

  • DOW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $365.9 million.
  • DOW traded 28,259 shares today in the pre-market hours as of 7:32 AM.
  • DOW is up 5.1% today from yesterday's close.

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More details on DOW:

The Dow Chemical Company manufactures and supplies products that are used primarily as raw materials in the manufacture of customer products and services worldwide. The stock currently has a dividend yield of 3.6%. DOW has a PE ratio of 16.4. Currently there are 7 analysts that rate Dow Chemical a buy, 2 analysts rate it a sell, and 9 rate it a hold.

The average volume for Dow Chemical has been 8.5 million shares per day over the past 30 days. Dow Chemical has a market cap of $54.7 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.76 and a short float of 1.1% with 1.81 days to cover. Shares are up 2.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Dow Chemical as a

buy

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.30, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $2,757.00 million or 23.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.94%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.8%. Since the same quarter one year prior, revenues slightly dropped by 0.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for DOW CHEMICAL is rather low; currently it is at 24.05%. Regardless of DOW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.69% trails the industry average.

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