Trade-Ideas LLC identified

Cabot

(

CBT

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cabot as such a stock due to the following factors:

  • CBT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.0 million.
  • CBT has traded 72,523 shares today.
  • CBT is down 5.6% today.
  • CBT was up 6.4% yesterday.

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More details on CBT:

Cabot Corporation operates as a specialty chemicals and performance materials company. The stock currently has a dividend yield of 2.5%. CBT has a PE ratio of 18. Currently there are 3 analysts that rate Cabot a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Cabot has been 329,900 shares per day over the past 30 days. Cabot has a market cap of $3.0 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.25 and a short float of 1.5% with 2.92 days to cover. Shares are up 26.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cabot as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 112.48% and other important driving factors, this stock has surged by 41.10% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CBT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 112.6% when compared to the same quarter one year prior, rising from -$445.00 million to $56.00 million.
  • Net operating cash flow has increased to $107.00 million or 46.57% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 9.55%.
  • The debt-to-equity ratio is somewhat low, currently at 0.74, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
  • CABOT CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CABOT CORP swung to a loss, reporting -$5.33 versus $2.99 in the prior year. This year, the market expects an improvement in earnings ($3.15 versus -$5.33).

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