Trade-Ideas: Cytec Industries (CYT) Is Today's New Lifetime High Stock

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 Cytec Industries ( CYT) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Cytec Industries as such a stock due to the following factors:

  • CYT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.9 million.
  • CYT has traded 7,830 shares today.
  • CYT is trading at a new lifetime high.

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More details on CYT:

Cytec Industries Inc., a specialty materials and chemicals company, focuses on developing, manufacturing, and selling value-added products for aerospace and industrial materials, mining, and plastics industries. The stock currently has a dividend yield of 0.8%. CYT has a PE ratio of 32. Currently there are 5 analysts that rate Cytec Industries a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Cytec Industries has been 437,100 shares per day over the past 30 days. Cytec has a market cap of $4.3 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.84 and a short float of 1.5% with 2.16 days to cover. Shares are up 31% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cytec Industries as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 14.0%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.40, which illustrates the ability to avoid short-term cash problems.
  • 36.04% is the gross profit margin for CYTEC INDUSTRIES INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.25% trails the industry average.
  • CYTEC INDUSTRIES INC's earnings per share declined by 23.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CYTEC INDUSTRIES INC reported lower earnings of $1.95 versus $2.21 in the prior year. This year, the market expects an improvement in earnings ($3.30 versus $1.95).
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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