FMC Corporation (FMC) Shows 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.

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 $37.4 million.
  • FMC has traded 552,708 shares today.
  • FMC traded in a range 207.1% of the normal price range with a price range of $1.54.
  • FMC traded below its daily resistance level (quality: 203 days, meaning that the stock is crossing a resistance level set by the last 203 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 the agricultural, consumer, and industrial markets in North America, Europe, the Middle East, Africa, Latin America, and the Asia Pacific. The stock currently has a dividend yield of 1.2%. FMC has a PE ratio of 31. Currently there are 5 analysts that rate FMC Corporation a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for FMC Corporation has been 1.0 million shares per day over the past 30 days. FMC has a market cap of $7.4 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 3.9% with 6.65 days to cover. Shares are down 3.5% year-to-date as of the close of trading on Tuesday.

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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 largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 14.7%. Since the same quarter one year prior, revenues fell by 12.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Even though the current debt-to-equity ratio is 1.43, it is still below the industry average, suggesting that this level of debt is acceptable within the Chemicals industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.81 is weak.
  • Net operating cash flow has significantly decreased to -$297.20 million or 207.02% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.59%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 167.14% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, FMC is still more expensive than most of the other companies in its industry.

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