Pall Corporation (PLL) Stock Storming The Castle Today

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 Pall Corporation ( PLL) 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 Pall Corporation as such a stock due to the following factors:

  • PLL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.8 million.
  • PLL has traded 736,452 shares today.
  • PLL is trading at 1.54 times the normal volume for the stock at this time of day.
  • PLL 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 PLL:

Pall Corporation manufactures and markets filtration, separation, and purification products; and integrated systems solutions worldwide. The stock currently has a dividend yield of 1.3%. PLL has a PE ratio of 25.5. Currently there are 4 analysts that rate Pall Corporation a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Pall Corporation has been 597,000 shares per day over the past 30 days. Pall has a market cap of $8.9 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.63 and a short float of 3.5% with 11.07 days to cover. Shares are down 3.3% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pall Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and growth in earnings per share. 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 4.1%. Since the same quarter one year prior, revenues rose by 11.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Machinery industry and the overall market, PALL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • PALL CORP has improved earnings per share by 42.1% 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, PALL CORP increased its bottom line by earning $3.26 versus $2.88 in the prior year. This year, the market expects an improvement in earnings ($3.88 versus $3.26).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 40.2% when compared to the same quarter one year prior, rising from $85.63 million to $120.09 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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