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 USG ( USG) 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 USG as such a stock due to the following factors:

  • USG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.9 million.
  • USG has traded 1.9 million shares today.
  • USG traded in a range 218.9% of the normal price range with a price range of $1.37.
  • USG traded above its daily resistance level (quality: 147 days, meaning that the stock is crossing a resistance level set by the last 147 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 USG with the Ticky from Trade-Ideas. See the FREE profile for USG NOW at Trade-Ideas

More details on USG:

USG Corporation, through its subsidiaries, operates as a manufacturer and distributor of building materials worldwide. USG has a PE ratio of 265. Currently there are 4 analysts that rate USG a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for USG has been 1.6 million shares per day over the past 30 days. USG has a market cap of $3.9 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.76 and a short float of 12.1% with 7.48 days to cover. Shares are down 3.1% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates USG as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • USG's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 6.9%. 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.
  • Net operating cash flow has increased to -$42.00 million or 34.37% when compared to the same quarter last year. Despite an increase in cash flow, USG CORP's average is still marginally south of the industry average growth rate of 35.08%.
  • USG CORP's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, USG CORP reported lower earnings of $0.26 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $0.26).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Building Products industry. The net income has significantly decreased by 46.7% when compared to the same quarter one year ago, falling from $45.00 million to $24.00 million.
  • In its most recent trading session, USG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.