Trade-Ideas LLC identified

Huntsman

(

HUN

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

  • HUN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.1 million.
  • HUN has traded 66,649 shares today.
  • HUN is down 3.2% today.
  • HUN was up 5.3% yesterday.

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More details on HUN:

Huntsman Corporation, together with its subsidiaries, manufactures and sells differentiated organic and inorganic chemical products worldwide. The company operates in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments and Additives. The stock currently has a dividend yield of 5.4%. HUN has a PE ratio of 23. Currently there are 3 analysts that rate Huntsman a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Huntsman has been 4.9 million shares per day over the past 30 days. Huntsman has a market cap of $2.2 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 2.97 and a short float of 5.1% with 2.26 days to cover. Shares are down 14.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Huntsman as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • 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 110.5% when compared to the same quarter one year prior, rising from -$38.00 million to $4.00 million.
  • HUNTSMAN 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, HUNTSMAN CORP reported lower earnings of $0.40 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $0.40).
  • HUN, with its decline in revenue, underperformed when compared the industry average of 10.7%. Since the same quarter one year prior, revenues fell by 21.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly decreased to $188.00 million or 54.91% 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.
  • HUN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 56.32%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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