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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

LSB Industries

(

LXU

) as a strong and under the radar 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 $5.1 million.
  • LXU is making at least a new 3-day high.
  • LXU has a PE ratio of 48.7.
  • LXU is mentioned 0.52 times per day on StockTwits.
  • LXU has not yet been mentioned on StockTwits today.
  • LXU is currently in the upper 20% of its 1-year range.
  • LXU is in the upper 35% of its 20-day range.
  • LXU is in the upper 45% of its 5-day range.
  • LXU is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on LXU:

LSB Industries, Inc., through its subsidiaries, manufactures and sells chemical products, water source and geothermal heat pumps, and air handling products. The company operates in two segments, Chemical Business and Climate Control Business. LXU has a PE ratio of 48.7. Currently there is 1 analyst that rates LSB Industries a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for LSB Industries has been 148,300 shares per day over the past 30 days. LSB has a market cap of $915.6 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 2.51 and a short float of 3.3% with 5.27 days to cover. Shares are up 31.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates LSB Industries as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 21.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $9.82 million or 12.20% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.48%.
  • Even though the current debt-to-equity ratio is 1.08, it is still below the industry average, suggesting that this level of debt is acceptable within the Chemicals industry. Despite the fact that LXU's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.87 is high and demonstrates strong liquidity.
  • 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 suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, LSB INDUSTRIES INC reported lower earnings of $0.82 versus $2.31 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $0.82).
  • The gross profit margin for LSB INDUSTRIES INC is rather low; currently it is at 22.41%. Regardless of LXU'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 0.36% trails the industry average.

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