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

  • VAL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $63.4 million.
  • VAL has traded 826,823 shares today.
  • VAL is trading at 1.70 times the normal volume for the stock at this time of day.
  • VAL 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 VAL:

The Valspar Corporation develops, manufactures, and distributes a range of coatings, paints, and related products worldwide. It operates in two segments, Coatings and Paints. The stock currently has a dividend yield of 1.7%. VAL has a PE ratio of 16. Currently there are 5 analysts that rate Valspar a buy, 2 analysts rate it a sell, and 6 rate it a hold.

The average volume for Valspar has been 653,800 shares per day over the past 30 days. Valspar has a market cap of $6.3 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.40 and a short float of 4% with 3.96 days to cover. Shares are down 4.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Valspar as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • 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. When compared to other companies in the Chemicals industry and the overall market, VALSPAR CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has increased to $270.60 million or 38.31% when compared to the same quarter last year. In addition, VALSPAR CORP has also vastly surpassed the industry average cash flow growth rate of -32.48%.
  • VALSPAR CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VALSPAR CORP increased its bottom line by earning $4.84 versus $4.02 in the prior year. This year, the market expects an improvement in earnings ($4.86 versus $4.84).
  • 38.82% is the gross profit margin for VALSPAR CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.90% trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.5%. Since the same quarter one year prior, revenues slightly dropped by 8.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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