Trade-Ideas: Polaris Industries (PII) Is Today's "Barbarian At The Gate" Stock
Trade-Ideas LLC identified
(
) 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 Polaris Industries as such a stock due to the following factors:
- PII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $95.7 million.
- PII has traded 2.1 million shares today.
- PII traded in a range 309.5% of the normal price range with a price range of $8.58.
- PII traded above its daily resistance level (quality: 75 days, meaning that the stock is crossing a resistance level set by the last 75 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 PII:
Polaris Industries Inc., together with its subsidiaries, designs, engineers, manufactures, and markets off-road vehicles, snowmobiles, motorcycles, and on-road vehicles in the United States, Canada, Western Europe, Australia, and Mexico. The stock currently has a dividend yield of 2.5%. PII has a PE ratio of 14. Currently there are 6 analysts that rate Polaris Industries a buy, 1 analyst rates it a sell, and 11 rate it a hold.
The average volume for Polaris Industries has been 1.2 million shares per day over the past 30 days. Polaris has a market cap of $5.7 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.20 and a short float of 18.6% with 11.84 days to cover. Shares are up 1.3% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Polaris Industries as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 3190.13% to $139.01 million when compared to the same quarter last year. In addition, POLARIS INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of 55.82%.
- The current debt-to-equity ratio, 0.56, 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 0.38 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The gross profit margin for POLARIS INDUSTRIES INC is currently lower than what is desirable, coming in at 28.07%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 4.77% is above that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Leisure Equipment & Products industry. The net income has significantly decreased by 47.0% when compared to the same quarter one year ago, falling from $88.56 million to $46.89 million.
- You can view the full Polaris Industries Ratings Report.
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