Trian Fund Management now holds a 7.24% in the pump and valve maker, according to the Wall Street Journal. The activist investor is reportedly asking he company to considering acquiring rivals to consolidate the market for specialized parts.
The activist investor has held talked with Pentair Chairman and CEO Randall Hogan for more than a month, and they agree on the future potential for the company, according to the Journal.
About 2.7 million shares of Pentair were traded by 10:18 a.m. Tuesday, above the company's average trading volume of about 1.4 million shares a day.
TheStreet Ratings team rates PENTAIR PLC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate PENTAIR PLC (PNR) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins, reasonable valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is somewhat low, currently at 0.77, 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 1.04, which illustrates the ability to avoid short-term cash problems.
- PENTAIR PLC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PENTAIR PLC increased its bottom line by earning $3.18 versus $2.51 in the prior year. This year, the market expects an improvement in earnings ($3.75 versus $3.18).
- 38.66% is the gross profit margin for PENTAIR PLC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.72% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.4%. Since the same quarter one year prior, revenues fell by 10.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: PNR Ratings Report