Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
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 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 $70.2 million.
- PII has traded 80,977 shares today.
- PII is trading at 1.82 times the normal volume for the stock at this time of day.
- PII 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 PII:
Polaris Industries Inc., together with its subsidiaries, designs, engineers, manufactures, and markets off-road vehicles, snowmobiles, motorcycles, and small vehicles in the United States, Canada, and Western Europe. The stock currently has a dividend yield of 1.5%. PII has a PE ratio of 23.6. Currently there are 9 analysts that rate Polaris Industries a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Polaris Industries has been 576,800 shares per day over the past 30 days. Polaris has a market cap of $8.6 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.55 and a short float of 7.4% with 8.44 days to cover. Shares are down 10.4% year-to-date as of the close of trading on Friday.
rates Polaris Industries as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, notable return on equity, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 19.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- POLARIS INDUSTRIES INC has improved earnings per share by 11.2% in the most recent quarter compared to the same quarter a year ago. 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, POLARIS INDUSTRIES INC increased its bottom line by earning $5.40 versus $4.40 in the prior year. This year, the market expects an improvement in earnings ($6.50 versus $5.40).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Leisure Equipment & Products industry and the overall market, POLARIS INDUSTRIES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has exceeded that of the Leisure Equipment & Products industry average, but is less than that of the S&P 500. The net income increased by 7.2% when compared to the same quarter one year prior, going from $75.46 million to $80.90 million.
- The current debt-to-equity ratio, 0.53, 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 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full Polaris Industries Ratings Report.