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

  • ARG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.4 million.
  • ARG has traded 734,734 shares today.
  • ARG traded in a range 222.3% of the normal price range with a price range of $4.00.
  • ARG traded above its daily resistance level (quality: 83 days, meaning that the stock is crossing a resistance level set by the last 83 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.

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More details on ARG:

Airgas, Inc., together with its subsidiaries, supplies industrial, medical, and specialty gases; and welding equipment and related products. It operates through two segments, Distribution and All Other Operations. The stock currently has a dividend yield of 2.5%. ARG has a PE ratio of 2. Currently there are 3 analysts that rate Airgas a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Airgas has been 629,700 shares per day over the past 30 days. Airgas has a market cap of $6.9 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.01 and a short float of 4.5% with 7.15 days to cover. Shares are down 17.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Airgas as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, growth in earnings per share, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 19.4%. Since the same quarter one year prior, revenues slightly increased by 1.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • AIRGAS INC reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AIRGAS INC increased its bottom line by earning $4.86 versus $4.68 in the prior year. This year, the market expects an improvement in earnings ($4.93 versus $4.86).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, AIRGAS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has slightly increased to $147.92 million or 2.05% when compared to the same quarter last year. Despite an increase in cash flow, AIRGAS INC's average is still marginally south of the industry average growth rate of 11.91%.

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