Trade-Ideas LLC identified Albemarle ( ALB) 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 Albemarle as such a stock due to the following factors:

  • ALB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $81.1 million.
  • ALB has traded 1.2 million shares today.
  • ALB traded in a range 200.5% of the normal price range with a price range of $2.82.
  • ALB traded below its daily resistance level (quality: 22 days, meaning that the stock is crossing a resistance level set by the last 22 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 ALB:

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. The stock currently has a dividend yield of 2.1%. ALB has a PE ratio of 33. Currently there are 7 analysts that rate Albemarle a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Albemarle has been 1.6 million shares per day over the past 30 days. Albemarle has a market cap of $6.1 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.76 and a short float of 6.9% with 4.73 days to cover. Shares are down 9.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Albemarle as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase 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, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • ALB's very impressive revenue growth greatly exceeded the industry average of 19.1%. Since the same quarter one year prior, revenues leaped by 54.0%. 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 132.3% when compared to the same quarter one year prior, rising from $22.45 million to $52.15 million.
  • 42.44% is the gross profit margin for ALBEMARLE CORP 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 5.59% trails the industry average.
  • 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, ALBEMARLE 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 $87.39 million or 40.13% 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.

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