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

  • PNR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $68.3 million.
  • PNR has traded 437,664 shares today.
  • PNR is trading at 1.76 times the normal volume for the stock at this time of day.
  • PNR 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 PNR:

Pentair plc operates as a diversified industrial manufacturing company in the United States, Europe, and internationally. The company operates through Valves & Controls, Technical Solutions, Flow & Filtration Solutions, and Water Quality Systems segments. The stock currently has a dividend yield of 2.6%. PNR has a PE ratio of 143. Currently there are 2 analysts that rate Pentair a buy, 1 analyst rates it a sell, and 14 rate it a hold.

The average volume for Pentair has been 1.6 million shares per day over the past 30 days. Pentair has a market cap of $9.3 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.44 and a short float of 7.4% with 9.44 days to cover. Shares are up 3.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pentair as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $343.40 million or 5.66% when compared to the same quarter last year. In addition, PENTAIR PLC has also modestly surpassed the industry average cash flow growth rate of -2.03%.
  • 38.50% is the gross profit margin for PENTAIR PLC 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 -25.74% is in-line with the industry average.
  • Despite the weak revenue results, PNR has outperformed against the industry average of 20.2%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Machinery industry. The net income has significantly decreased by 475.2% when compared to the same quarter one year ago, falling from $120.80 million to -$453.30 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Machinery industry and the overall market, PENTAIR PLC's return on equity significantly trails that of both the industry average and the S&P 500.

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