Trade-Ideas LLC identified

Axiall

(

AXLL

) 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 Axiall as such a stock due to the following factors:

  • AXLL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.7 million.
  • AXLL has traded 1.2 million shares today.
  • AXLL traded in a range 211.5% of the normal price range with a price range of $2.19.
  • AXLL traded above its daily resistance level (quality: 56 days, meaning that the stock is crossing a resistance level set by the last 56 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 AXLL:

Axiall Corporation manufactures and markets chemicals and building products in the United States and internationally. The company operates through three segments: Chlorovinyls, Building Products, and Aromatics. The stock currently has a dividend yield of 7%. Currently there are 2 analysts that rate Axiall a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Axiall has been 1.5 million shares per day over the past 30 days. Axiall has a market cap of $681.8 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 4.6% with 2.19 days to cover. Shares are down 37.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Axiall 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 1829.4% when compared to the same quarter one year ago, falling from $44.50 million to -$769.60 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, AXIALL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AXIALL CORP is currently extremely low, coming in at 13.44%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -88.01% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $118.50 million or 18.44% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 78.21%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1900.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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