Trade-Ideas LLC identified Albemarle ( ALB) 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 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 $60.1 million.
  • ALB has traded 1.3 million shares today.
  • ALB traded in a range 205.6% of the normal price range with a price range of $2.68.
  • ALB traded above its daily resistance level (quality: 8 days, meaning that the stock is crossing a resistance level set by the last 8 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 ALB:

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. The stock currently has a dividend yield of 2.4%. ALB has a PE ratio of 39. Currently there are 7 analysts that rate Albemarle a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Albemarle has been 1.5 million shares per day over the past 30 days. Albemarle has a market cap of $5.4 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.78 and a short float of 8.5% with 8.09 days to cover. Shares are down 19% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Albemarle as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 18.1%. Since the same quarter one year prior, revenues rose by 40.9%. 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 $183.72 million or 35.69% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.70%.
  • 42.97% 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 7.22% trails the industry average.
  • Even though the current debt-to-equity ratio is 1.22, it is still below the industry average, suggesting that this level of debt is acceptable within the Chemicals industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.70 is weak.
  • ALBEMARLE CORP's earnings per share declined by 42.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ALBEMARLE CORP reported lower earnings of $2.56 versus $4.89 in the prior year. This year, the market expects an improvement in earnings ($3.74 versus $2.56).

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