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

  • MEOH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.4 million.
  • MEOH has traded 1.4 million shares today.
  • MEOH traded in a range 205.3% of the normal price range with a price range of $2.93.
  • MEOH traded above its daily resistance level (quality: 19 days, meaning that the stock is crossing a resistance level set by the last 19 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 MEOH:

Methanex Corporation produces and supplies methanol in the Asia Pacific, North America, Europe, and South America. It also purchases methanol produced by others under methanol offtake contracts and on the spot market. The company was founded in 1968 and is headquartered in Vancouver, Canada. The stock currently has a dividend yield of 3.6%. MEOH has a PE ratio of 15. Currently there are 4 analysts that rate Methanex a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Methanex has been 1.4 million shares per day over the past 30 days. Methanex has a market cap of $2.7 billion and is part of the basic materials sector and chemicals industry. Shares are down 6.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Methanex as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.30, which illustrates the ability to avoid short-term cash problems.
  • MEOH, with its decline in revenue, underperformed when compared the industry average of 11.1%. Since the same quarter one year prior, revenues fell by 34.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for METHANEX CORP is currently extremely low, coming in at 9.90%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 1.92% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to $43.96 million or 79.15% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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