Eyes On Praxair (PX): Highlighted Storm The Castle Stock
Trade-Ideas LLC identified
(
) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Praxair as such a stock due to the following factors:
- PX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $185.3 million.
- PX has traded 859,124 shares today.
- PX is trading at 1.53 times the normal volume for the stock at this time of day.
- PX crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on PX:
Praxair, Inc. produces, sells, and distributes atmospheric, process, and specialty gases, as well as surface coatings in North America, Europe, South America, and Asia. The stock currently has a dividend yield of 2.5%. PX has a PE ratio of 23. Currently there are 7 analysts that rate Praxair a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for Praxair has been 1.9 million shares per day over the past 30 days. Praxair has a market cap of $32.3 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.95 and a short float of 3% with 5.42 days to cover. Shares are down 10.5% year-to-date as of the close of trading on Monday.
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Analysis:
rates Praxair as a
. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- 44.60% is the gross profit margin for PRAXAIR INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.92% is above that of the industry average.
- 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. In comparison to other companies in the Chemicals industry and the overall market on the basis of return on equity, PRAXAIR INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 19.3%. Since the same quarter one year prior, revenues fell by 14.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has declined marginally to $676.00 million or 5.18% 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.
- The debt-to-equity ratio is very high at 2.23 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, PX maintains a poor quick ratio of 0.86, which illustrates the inability to avoid short-term cash problems.
- You can view the full Praxair Ratings Report.
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