Watch Out: Barbarians At The Gate For Eastman Chemical (EMN)

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 Eastman Chemical ( EMN) 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 Eastman Chemical as such a stock due to the following factors:

  • EMN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $91.8 million.
  • EMN has traded 183,956 shares today.
  • EMN traded in a range 236.3% of the normal price range with a price range of $2.20.
  • EMN traded above its daily resistance level (quality: 44 days, meaning that the stock is crossing a resistance level set by the last 44 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 EMN with the Ticky from Trade-Ideas. See the FREE profile for EMN NOW at Trade-Ideas

More details on EMN:

Eastman Chemical Company, a specialty chemical company, manufactures and sells chemicals, plastics, and fibers in the United States and internationally. The stock currently has a dividend yield of 1.7%. EMN has a PE ratio of 10.9. Currently there are 9 analysts that rate Eastman Chemical a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Eastman Chemical has been 1.1 million shares per day over the past 30 days. Eastman Chemical has a market cap of $12.4 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.73 and a short float of 1.4% with 2.12 days to cover. Shares are up 3.6% year-to-date as of the close of trading on Wednesday.

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 Eastman Chemical as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, notable return on equity, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Chemicals industry average. The net income increased by 10.6% when compared to the same quarter one year prior, going from $264.00 million to $292.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 0.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Chemicals industry and the overall market, EASTMAN CHEMICAL CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has increased to $419.00 million or 15.74% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.52%.

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

null

More from Markets

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices