FMC Corporation (FMC) Showing Signs Of Being Water-Logged And Getting Wetter

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 $68.1 million.
  • FMC has traded 522,268 shares today.
  • FMC traded in a range 220.4% of the normal price range with a price range of $1.56.
  • FMC traded below its daily resistance level (quality: 27 days, meaning that the stock is crossing a resistance level set by the last 27 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, applications, and products for agricultural, industrial, environmental, and consumer markets. It operates in three segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Minerals. The stock currently has a dividend yield of 0.9%. FMC has a PE ratio of 20.0. Currently there are 4 analysts that rate FMC Corporation a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for FMC Corporation has been 1.1 million shares per day over the past 30 days. FMC has a market cap of $8.7 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.17 and a short float of 4% with 3.42 days to cover. Shares are down 12.4% year-to-date as of the close of trading on Monday.

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 revenue growth, growth in earnings per share, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • FMC's revenue growth has slightly outpaced the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FMC CORP has improved earnings per share by 5.9% in the most recent quarter compared to the same quarter a year ago. 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 $3.31 versus $3.20 in the prior year. This year, the market expects an improvement in earnings ($4.19 versus $3.31).
  • 39.61% is the gross profit margin for FMC CORP which we consider to be strong. Regardless of FMC'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 11.04% trails the industry average.
  • FMC's debt-to-equity ratio of 0.99 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.95 is weak.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Chemicals industry and the overall market, FMC CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

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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