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Trade-Ideas LLC identified

LSB Industries

(

LXU

) as a "perilous reversal" (up big yesterday but down big today) 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 $21.5 million.
  • LXU has traded 297,133 shares today.
  • LXU is down 3.4% today.
  • LXU was up 34.3% yesterday.

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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 in the United States and internationally. It operates through two segments, Chemical Business and Climate Control Business. Currently there are 2 analysts that rate LSB Industries a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Recommends

The average volume for LSB Industries has been 847,300 shares per day over the past 30 days. LSB has a market cap of $252.3 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 4.34 and a short float of 14.9% with 1.77 days to cover. Shares are up 95.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates LSB Industries as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • 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 1328.0% when compared to the same quarter one year ago, falling from $0.66 million to -$8.07 million.
  • 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.
  • The gross profit margin for LSB INDUSTRIES INC is rather low; currently it is at 18.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.13% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$10.94 million or 211.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 81.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1700.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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