Between The Sheets With Powell Industries

What They Do

Powell Industries (POWL) develops, designs, manufactures and services custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy for the oil and gas refining, offshore oil and gas production, petrochemical, pipeline, terminal, mining and metals, light rail traction power, electric utility, pulp and paper industries and other heavy industrial markets.

Short-Term Target

My short-term target for the stock is $34.37, with an initial trailing stop set at $25.19. With a current price of $25.57, upward price movement will find resistance at $27.62 and again at $29.63 with final resistance found at $31.59. Downward price movement will find no support.

Momentum Target

My momentum target for the stock is $(7). Momentum targets are determined by overlaying a company's most recent annual EPS, its year-over-year earnings growth, and the current yield of a 10-year treasury. As a value investor, the central issue that I have using momentum targets is that they require investors to trade in stocks that have already enjoyed significant gains while making no allowances for the sustainability of a company's earnings.

Growth Target

My growth target for the stock is $25. Growth targets are determined using a company's year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Fair Value Investing

Fair value investing requires investors to consider a company's overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. For many fair value investors, the minimum required hold is five (5) years. What follows are some of the metrics I use to determine my fair value estimates. They are presented only to assist investors considering an investment in Powell Industries.

Average Volume

The average volume number is simply an average of the number of shares traded over a specific period of time, in this case, the prior 50 days. The lower the number the greater the volatility the markets can impact on the stock price. For Powell Industries the most recent ADV number is 0.038 million shares.

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Disclosure: I am not a licensed or registered investment professional, nor am I qualified to provide investment advice. I also hold no shares of the stock mentioned in this ...

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