Water-Logged And Getting Wetter: FMC Corporation (FMC)

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 FMC Corporation ( FMC) 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 FMC Corporation as such a stock due to the following factors:

  • FMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.3 million.
  • FMC has traded 398,533 shares today.
  • FMC traded in a range 226% of the normal price range with a price range of $2.21.
  • FMC traded below its daily resistance level (quality: 18 days, meaning that the stock is crossing a resistance level set by the last 18 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 FMC:

FMC Corporation, a diversified chemical company, provides solutions and products for agricultural, consumer, and industrial markets. It operates in three segments: Agricultural Products, Specialty Chemicals, and Industrial Chemicals. The stock currently has a dividend yield of 0.8%. FMC has a PE ratio of 21.4. Currently there are 7 analysts that rate FMC Corporation a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for FMC Corporation has been 761,500 shares per day over the past 30 days. FMC has a market cap of $9.7 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.10 and a short float of 4% with 9.59 days to cover. Shares are up 22% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates FMC Corporation as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, good cash flow from operations, growth in earnings per share and increase in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 39.04% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FMC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $277.60 million or 18.32% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.90%.
  • FMC CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FMC CORP increased its bottom line by earning $3.23 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($3.84 versus $3.23).
  • The net income growth from the same quarter one year ago has exceeded that of the Chemicals industry average, but is less than that of the S&P 500. The net income increased by 12.5% when compared to the same quarter one year prior, going from $104.90 million to $118.00 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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