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 or Stephanie Link.
Trade-Ideas LLC identified
) 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 Louisiana-Pacific as such a stock due to the following factors:
- LPX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $52.1 million.
- LPX has traded 736,969 shares today.
- LPX traded in a range 284% of the normal price range with a price range of $1.34.
- LPX traded above its daily resistance level (quality: 271 days, meaning that the stock is crossing a resistance level set by the last 271 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.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in LPX with the Ticky from Trade-Ideas. See the FREE profile for LPX NOW at Trade-Ideas
More details on LPX:
Louisiana-Pacific Corporation, together with its subsidiaries, manufactures and sells building products for new home construction, repair and remodeling, manufactured housing, and light industrial and commercial construction. Currently there are 6 analysts that rate Louisiana-Pacific a buy, 3 analysts rate it a sell, and 1 rates it a hold.
The average volume for Louisiana-Pacific has been 3.4 million shares per day over the past 30 days. Louisiana-Pacific has a market cap of $2.2 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.84 and a short float of 20.4% with 8.37 days to cover. Shares are down 15.7% year-to-date as of the close of trading on Thursday.
rates Louisiana-Pacific as a
. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 4.10, which clearly demonstrates the ability to cover short-term cash needs.
- LOUISIANA-PACIFIC CORP 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LOUISIANA-PACIFIC CORP increased its bottom line by earning $1.22 versus $0.20 in the prior year. For the next year, the market is expecting a contraction of 127.0% in earnings (-$0.33 versus $1.22).
- The gross profit margin for LOUISIANA-PACIFIC CORP is currently extremely low, coming in at 7.93%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.93% trails that of the industry average.
- Net operating cash flow has significantly decreased to $27.50 million or 53.54% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full Louisiana-Pacific Ratings Report.