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 Huntsman ( HUN) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Huntsman as such a stock due to the following factors:

  • HUN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.7 million.
  • HUN has traded 229,376 shares today.
  • HUN is trading at 3.24 times the normal volume for the stock at this time of day.
  • HUN is trading at a new low 3.03% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on HUN:

Huntsman Corporation, together with its subsidiaries, manufactures and sells differentiated organic and inorganic chemical products worldwide. The company operates in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments and Additives. The stock currently has a dividend yield of 2.5%. HUN has a PE ratio of 18. Currently there are 6 analysts that rate Huntsman a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Huntsman has been 2.5 million shares per day over the past 30 days. Huntsman has a market cap of $4.9 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.97 and a short float of 6.4% with 4.75 days to cover. Shares are down 13.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Huntsman as a buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 150.74% to $34.00 million when compared to the same quarter last year. In addition, HUNTSMAN CORP has also vastly surpassed the industry average cash flow growth rate of -94.32%.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, HUNTSMAN CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • HUNTSMAN CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HUNTSMAN CORP increased its bottom line by earning $1.34 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($2.23 versus $1.34).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.7%. Since the same quarter one year prior, revenues slightly dropped by 6.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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