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 "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 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 $54.0 million.
  • FMC has traded 1.2 million shares today.
  • FMC traded in a range 207.3% of the normal price range with a price range of $2.04.
  • FMC traded above its daily resistance level (quality: 81 days, meaning that the stock is crossing a resistance level set by the last 81 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.

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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 1%. FMC has a PE ratio of 17.6. 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 1.4 million shares per day over the past 30 days. FMC has a market cap of $7.7 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.26 and a short float of 3.2% with 4.13 days to cover. Shares are up 0.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates FMC Corporation as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 214.5% when compared to the same quarter one year prior, rising from $17.90 million to $56.30 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 6.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 35.04% 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 5.54% trails the industry average.
  • The debt-to-equity ratio of 1.01 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, FMC maintains a poor quick ratio of 0.97, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has decreased to $86.60 million or 25.40% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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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