Trade-Ideas LLC identified

Agrium

(

AGU

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Agrium as such a stock due to the following factors:

  • AGU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $103.4 million.
  • AGU has traded 254,462 shares today.
  • AGU is trading at 1.58 times the normal volume for the stock at this time of day.
  • AGU crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AGU:

Agrium Inc. produces, markets, and distributes crop nutrients, crop protection products, seeds, and merchandise products primarily in the United States, Canada, Australia, and South America. It operates in two segments, Retail and Wholesale. The stock currently has a dividend yield of 4%. AGU has a PE ratio of 13. Currently there are 7 analysts that rate Agrium a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Agrium has been 989,700 shares per day over the past 30 days. Agrium has a market cap of $12.2 billion and is part of the basic materials sector and chemicals industry. Shares are up 1.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Agrium as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.85, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.44 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The gross profit margin for AGRIUM INC is rather low; currently it is at 22.02%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.07% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $343.00 million or 51.34% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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