Trade-Ideas: Plum Creek Timber (PCL) Is Today's Momo Momentum Stock

Trade-Ideas LLC identified Plum Creek Timber (PCL) as a momo momentum candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Plum Creek Timber

(

PCL

) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Plum Creek Timber as such a stock due to the following factors:

  • PCL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $165.5 million.
  • PCL has a PE ratio of 35.
  • PCL is currently in the upper 30% of its 1-year range.
  • PCL is in the upper 25% of its 20-day range.
  • PCL is in the upper 35% of its 5-day range.
  • PCL is currently trading above yesterday's high.
  • PCL has experienced a gap between today's open and yesterday's close of 0.8%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on PCL:

Plum Creek Timber Company, Inc. is a publicly owned real estate investment trust (REIT). The trust owns and manages timberlands in the United States. Its products include lumber products, plywood, medium density fiberboard, and related by-products, such as wood chips. The stock currently has a dividend yield of 3.8%. PCL has a PE ratio of 35. Currently there is 1 analyst that rates Plum Creek Timber a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Plum Creek Timber has been 1.5 million shares per day over the past 30 days. Plum Creek Timber has a market cap of $8.0 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.69 and a short float of 5.7% with 2.95 days to cover. Shares are up 10.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Plum Creek Timber as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, compelling growth in net income and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • PCL's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 10.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, PLUM CREEK TIMBER CO INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 63.9% when compared to the same quarter one year prior, rising from $61.00 million to $100.00 million.
  • Net operating cash flow has increased to $195.00 million or 46.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.55%.

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