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Trade-Ideas LLC identified

LSB Industries

(

LXU

) as a strong 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 $6.9 million.
  • LXU has traded 54,948 shares today.
  • LXU is trading at 7.05 times the normal volume for the stock at this time of day.
  • LXU is trading at a new high 3.06% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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. The company operates in two segments, Chemical Business and Climate Control Business. LXU has a PE ratio of 142. 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 211,300 shares per day over the past 30 days. LSB has a market cap of $518.8 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 2.75 and a short float of 3% with 2.03 days to cover. Shares are down 26.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates LSB Industries as a

hold

. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.8%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Even though the current debt-to-equity ratio is 1.07, it is still below the industry average, suggesting that this level of debt is acceptable within the Chemicals industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.32 is sturdy.
  • 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.
  • 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, LSB INDUSTRIES INC reported lower earnings of $0.82 versus $2.31 in the prior year. For the next year, the market is expecting a contraction of 54.9% in earnings ($0.37 versus $0.82).
  • 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 96.2% when compared to the same quarter one year ago, falling from $11.11 million to $0.42 million.

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