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 "water-logged and getting wetter" (weak stocks crossing below support 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 $88.9 million.
- PII has traded 796,465 shares today.
- PII traded in a range 206.6% of the normal price range with a price range of $4.98.
- PII traded below its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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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 1.4%. PII has a PE ratio of 23.6. Currently there are 11 analysts that rate Polaris Industries a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Polaris Industries has been 849,500 shares per day over the past 30 days. Polaris has a market cap of $10.4 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 0.99 and a short float of 10.7% with 11.63 days to cover. Shares are up 4.2% year-to-date as of the close of trading on Thursday.
rates Polaris Industries as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 4.6%. Since the same quarter one year prior, revenues rose by 17.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- POLARIS INDUSTRIES INC has improved earnings per share by 26.9% 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 $6.65 versus $5.40 in the prior year. This year, the market expects an improvement in earnings ($7.48 versus $6.65).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Leisure Equipment & Products industry average. The net income increased by 24.6% when compared to the same quarter one year prior, going from $108.68 million to $135.40 million.
- Net operating cash flow has increased to $148.84 million or 33.99% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.70%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full Polaris Industries Ratings Report.