Century Aluminum (CENX) Marked As A Barbarian At The Gate

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.

Trade-Ideas LLC identified Century Aluminum ( CENX) 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 Century Aluminum as such a stock due to the following factors:

  • CENX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.7 million.
  • CENX has traded 1.4 million shares today.
  • CENX traded in a range 256.4% of the normal price range with a price range of $1.28.
  • CENX traded above its daily resistance level (quality: 23 days, meaning that the stock is crossing a resistance level set by the last 23 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 CENX:

Century Aluminum Company, together with its subsidiaries, produces primary aluminum in the United States and Iceland. It produces standard grade and value-added primary aluminum products; and carbon products, such as anodes and cathodes. CENX has a PE ratio of 11.4. Currently there are 2 analysts that rate Century Aluminum a buy, 2 analysts rate it a sell, and 3 rate it a hold.

The average volume for Century Aluminum has been 2.2 million shares per day over the past 30 days. Century Aluminum has a market cap of $1.2 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.06 and a short float of 17.7% with 5.98 days to cover. Shares are down 46.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Century Aluminum as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 18.8%. Since the same quarter one year prior, revenues rose by 37.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CENTURY ALUMINUM CO reported significant earnings per share improvement 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, CENTURY ALUMINUM CO turned its bottom line around by earning $1.13 versus -$0.46 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $1.13).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 739.3% when compared to the same quarter one year prior, rising from -$9.68 million to $61.85 million.
  • Net operating cash flow has significantly increased by 534.02% to $98.70 million when compared to the same quarter last year. In addition, CENTURY ALUMINUM CO has also vastly surpassed the industry average cash flow growth rate of -43.35%.

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