In this long-term chart of FMC, above, we can see the big rally from the 2009 low and the big decline.
Notice in the bottom panel of this monthly chart the extreme oversold readings from the stochastic indicator (an overbought/oversold indicator). These are the most oversold readings in over a decade and suggest that prices are washed out here.
In this short-term chart of FMC, above, we have a couple more positive clues.
In the past four to six weeks, the volume of trading in FMC has been heavy. Selling interests and buying interests have been matched because prices have stabilized.
Also, we are seeing a bullish divergence between the lower lows in prices for FMC and the equal lows in the momentum study. Higher lows would be more bullish, but equal lows are still a bullish divergence.
From here, we would anticipate more sideways price action in FMC. Some sideways price action could precede a better markup in the months ahead. A close below $31 would prompt us to reexamine our thoughts.
Separately, TheStreet Ratings team rates FMC CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate FMC CORP (FMC) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 11.6%. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 580.4% when compared to the same quarter one year prior, rising from $109.10 million to $742.30 million.
- 40.19% is the gross profit margin for FMC CORP which we consider to be strong. Regardless of FMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FMC's net profit margin of 83.67% significantly outperformed against the industry.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Chemicals industry and the overall market, FMC CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has decreased to $124.60 million or 41.19% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: FMC