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Trade-Ideas LLC identified

LSB Industries

(

LXU

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified LSB Industries as such a stock due to the following factors:

  • LXU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.4 million.
  • LXU has traded 109,629 shares today.
  • LXU is trading at 3.35 times the normal volume for the stock at this time of day.
  • LXU is trading at a new low 3.08% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. 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 (or avoid losses by trimming weak positions). 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 LXU:

TheStreet Recommends

LSB Industries, Inc., through its subsidiaries, manufactures and sells chemical products, water source and geothermal heat pumps, and air handling products in the United States and internationally. It operates through two segments, Chemical Business and Climate Control Business. Currently there are 2 analysts that rate LSB Industries a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for LSB Industries has been 795,200 shares per day over the past 30 days. LSB has a market cap of $276.1 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 4.34 and a short float of 24.2% with 13.09 days to cover. Shares are up 59.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates LSB Industries as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • 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 324.7% when compared to the same quarter one year ago, falling from $6.65 million to -$14.94 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Chemicals industry and the overall market, LSB INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LSB INDUSTRIES INC is rather low; currently it is at 24.21%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.02% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 68.55%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 485.71% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • LSB INDUSTRIES INC 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, LSB INDUSTRIES INC swung to a loss, reporting -$1.66 versus $0.82 in the prior year. This year, the market expects an improvement in earnings (-$1.49 versus -$1.66).

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