Trade-Ideas LLC identified Potash Corp of Saskatchewan ( POT) 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 Potash Corp of Saskatchewan as such a stock due to the following factors:

  • POT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $143.8 million.
  • POT has traded 12.1 million shares today.
  • POT traded in a range 244% of the normal price range with a price range of $1.28.
  • POT traded above its daily resistance level (quality: 26 days, meaning that the stock is crossing a resistance level set by the last 26 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 POT:

Potash Corporation of Saskatchewan Inc., together with its subsidiaries, produces and sells fertilizers, and related industrial and feed products worldwide. It operates in three segments: Potash, Nitrogen, and Phosphate. The stock currently has a dividend yield of 6.2%. POT has a PE ratio of 11. Currently there are 5 analysts that rate Potash Corp of Saskatchewan a buy, 2 analysts rate it a sell, and 11 rate it a hold.

The average volume for Potash Corp of Saskatchewan has been 8.9 million shares per day over the past 30 days. Potash Corp of Saskatchewan has a market cap of $13.5 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.42 and a short float of 3.3% with 2.96 days to cover. Shares are down 5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Potash Corp of Saskatchewan 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 expanding profit margins. 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 weak operating cash flow.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.42 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 37.52% is the gross profit margin for POTASH CORP SASK INC which we consider to be strong. Regardless of POT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, POT's net profit margin of 14.84% compares favorably to the industry average.
  • POT, with its decline in revenue, underperformed when compared the industry average of 11.1%. Since the same quarter one year prior, revenues fell by 28.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 50.6% when compared to the same quarter one year ago, falling from $407.00 million to $201.00 million.
  • Net operating cash flow has decreased to $623.00 million or 12.62% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, POTASH CORP SASK INC has marginally lower results.

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