Trade-Ideas LLC identified PACCAR ( PCAR) 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 PACCAR as such a stock due to the following factors:

  • PCAR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $149.1 million.
  • PCAR has traded 69,711 shares today.
  • PCAR traded in a range 234% of the normal price range with a price range of $3.04.
  • PCAR traded below its daily resistance level (quality: 24 days, meaning that the stock is crossing a resistance level set by the last 24 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 PCAR:

PACCAR Inc, together with its subsidiaries, designs, manufactures, and distributes light, medium, and heavy-duty trucks and related aftermarket parts worldwide. It operates through three segments: Truck, Parts, and Financial Services. The stock currently has a dividend yield of 1.8%. PCAR has a PE ratio of 12. Currently there are 8 analysts that rate PACCAR a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for PACCAR has been 2.5 million shares per day over the past 30 days. PACCAR has a market cap of $19.1 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.45 and a short float of 5.5% with 6.62 days to cover. Shares are down 19.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PACCAR as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and attractive valuation levels. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 18.3%. Since the same quarter one year prior, revenues rose by 11.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PACCAR INC has improved earnings per share by 40.0% 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, PACCAR INC increased its bottom line by earning $3.82 versus $3.30 in the prior year. This year, the market expects an improvement in earnings ($4.70 versus $3.82).
  • 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 40.1% when compared to the same quarter one year prior, rising from $319.20 million to $447.20 million.
  • 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, PACCAR INC's return on equity exceeds that of both the industry average and the S&P 500.

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