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

Praxair

(

PX

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Praxair as such a stock due to the following factors:

  • PX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $152.0 million.
  • PX has traded 140,570 shares today.
  • PX traded in a range 218.6% of the normal price range with a price range of $3.68.
  • PX traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on PX:

Praxair, Inc. produces, sells, and distributes atmospheric, process, and specialty gases, as well as surface coatings in North America, Europe, South America, and Asia. The stock currently has a dividend yield of 2.6%. PX has a PE ratio of 2. Currently there are 7 analysts that rate Praxair a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Praxair has been 1.3 million shares per day over the past 30 days. Praxair has a market cap of $32.2 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.81 and a short float of 2.3% with 5.10 days to cover. Shares are down 10.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Praxair as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • 44.50% is the gross profit margin for PRAXAIR INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.08% is above that of the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to other companies in the Chemicals industry and the overall market on the basis of return on equity, PRAXAIR INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.7%. Since the same quarter one year prior, revenues slightly dropped by 8.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • PRAXAIR INC's earnings per share declined by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, PRAXAIR INC reported lower earnings of $5.74 versus $5.87 in the prior year. This year, the market expects an improvement in earnings ($6.00 versus $5.74).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Chemicals industry average. The net income has decreased by 7.1% when compared to the same quarter one year ago, dropping from $448.00 million to $416.00 million.

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