Weak On High Volume: PGT (PGTI)

Trade-Ideas LLC identified PGT ( PGTI) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified PGT as such a stock due to the following factors:

  • PGTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.9 million.
  • PGTI has traded 304,771 shares today.
  • PGTI is trading at 17.29 times the normal volume for the stock at this time of day.
  • PGTI is trading at a new low 8.34% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. 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 (or avoid losses by trimming weak positions). 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 PGTI:

PGT, Inc. manufactures and supplies residential impact-resistant windows and doors in the Southeastern United States, the Gulf Coast, Coastal mid-Atlantic, the Caribbean, Central America, and Canada. PGTI has a PE ratio of 33. Currently there are 7 analysts that rate PGT a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for PGT has been 371,300 shares per day over the past 30 days. PGT has a market cap of $585.7 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.96 and a short float of 5.7% with 7.03 days to cover. Shares are up 5.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PGT as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.3%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • PGT INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. 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, PGT INC increased its bottom line by earning $0.46 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($0.57 versus $0.46).
  • Although PGTI's debt-to-equity ratio of 2.36 is very high, it is currently less than that of the industry average. Regardless of the company's weak debt-to-equity ratio, PGTI has managed to keep a strong quick ratio of 2.06, which demonstrates the ability to cover short-term cash needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Building Products industry and the overall market on the basis of return on equity, PGT INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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