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
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ashland as such a stock due to the following factors:
- ASH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $71.1 million.
- ASH has traded 88,957 shares today.
- ASH traded in a range 340.2% of the normal price range with a price range of $6.65.
- ASH traded below its daily resistance level (quality: 252 days, meaning that the stock is crossing a resistance level set by the last 252 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on ASH:
Ashland Inc. operates as a specialty chemicals company worldwide. The company's Specialty Ingredients segment provides products, technologies, and resources for solving formulation and product-performance challenges. The stock currently has a dividend yield of 1.4%. ASH has a PE ratio of 46. Currently there are 8 analysts that rate Ashland a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Ashland has been 658,200 shares per day over the past 30 days. Ashland has a market cap of $7.8 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.73 and a short float of 1.3% with 1.38 days to cover. Shares are down 1.4% year-to-date as of the close of trading on Tuesday.
rates Ashland as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat 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 611.4% when compared to the same quarter one year prior, rising from -$44.00 million to $225.00 million.
- 37.70% is the gross profit margin for ASHLAND 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 16.66% is above that of the industry average.
- Net operating cash flow has significantly increased by 115.34% to $407.00 million when compared to the same quarter last year. In addition, ASHLAND INC has also vastly surpassed the industry average cash flow growth rate of -94.32%.
- Even though the current debt-to-equity ratio is 1.06, it is still below the industry average, suggesting that this level of debt is acceptable within the Chemicals industry. Despite the fact that ASH's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.57 is high and demonstrates strong liquidity.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Ashland Ratings Report.