Pentair Cleans Up

NEW YORK (TheStreet) -- Most of the water and sewer systems in the world were built 60 years ago. They were supposed to last 50 years.

Local governments around the world have been postponing maintenance on their pipes. But engineers know the chickens will come home to roost.

Pentair (PNR) is just one of the companies that wants to be there when it happens. This company makes valves and filters and lots of other good things that people need for clean water and treated sewage.

With everyone living closer together, that means water has to be cleaner when you treat it and put it in the nearby river or bay or oceans. They used to say "The solution to pollution is dilution." No more. Today the motto is "We are all downstream."

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That's all good. But being good is not good enough for the market. Let 's take a look at this global leader in supersized plumbing fixtures.

Pentair is a global water, fluid, thermal management, and equipment protection partner. Recently Pentair has been buying and selling assets, to pretty good effect:

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Over the last four quarters, sales were up 102%, and PNR continues to look forward to more growth. Analysts estimate earnings will grow 34% next and 24% after that.

When I put PNR through my Best Stocks Now filters, it comes out pretty good. Let's take a closer look.

Performance

Over the past 10 years PNR has almost tripled the returns of the market. Over the past five years it has delivered 32% per year. Over the last three years PNR has more than doubled the returns of the market. Over the last 12 months, it is up 55%.

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The stock gets a performance grade of A- when I compare it against the other 3,700 stocks I track in my app.

Valuation

From a valuation point of view, PNR passes the test. It is currently trading at 17.7 times forward earnings. It is expected to grow these earnings by 14.3% per year over the next five years. It has a PEG ratio of 1.24.

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Now this is not a screaming bargain, but when I take the earnings estimates, carry them out over the next five years and then apply a multiple on them, I come up with a $125 target price five years from now. The stock closed Thursday at $69.75.

PNR passes my both my performance and value test.

Stock Chart

How does the chart look? It's in a strong uptrend hitting new highs. I only have two words to say about this chart: Hubba hubba.

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Out of the nearly 3,700 stocks I track in my database, PNR comes in at #137 and it is a stock that I own at Gunderson Capital Management.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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