Trade-Ideas LLC identified

Cytec Industries

(

CYT

) 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 Cytec Industries as such a stock due to the following factors:

  • CYT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.2 million.
  • CYT has traded 229,357 shares today.
  • CYT traded in a range 288.1% of the normal price range with a price range of $0.71.
  • CYT traded below its daily resistance level (quality: 34 days, meaning that the stock is crossing a resistance level set by the last 34 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 CYT:

Cytec Industries Inc., a specialty materials and chemicals company, focuses on developing, manufacturing, and selling value-added products for aerospace and industrial materials, mining, and plastics industries. The stock currently has a dividend yield of 0.7%. CYT has a PE ratio of 4. Currently there are 3 analysts that rate Cytec Industries a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Cytec Industries has been 1.2 million shares per day over the past 30 days. Cytec has a market cap of $5.3 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.83 and a short float of 2.1% with 2.23 days to cover. Shares are up 59.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cytec Industries as a

buy

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.47, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $54.80 million or 24.54% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.74%.
  • Compared to its closing price of one year ago, CYT's share price has jumped by 50.91%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.2%. Since the same quarter one year prior, revenues slightly dropped by 3.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 36.93% is the gross profit margin for CYTEC INDUSTRIES INC which we consider to be strong. Regardless of CYT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.76% trails the industry average.

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