2-Star Stocks Poised to Plunge: Pall?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, filtration specialist Pall (NYSE: PLL  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Pall's business and see what CAPS investors are saying about the stock right now.

Pall facts

Headquarters (founded) Port Washington, N.Y. (1946)
Market Cap $6.9 billion
Industry Industrial machinery
Trailing-12-Month Revenue $2.8 billion
Management CEO Lawrence Kingsley (since October 2011)
CFO Lisa McDermott (since January 2006)
Return on Equity (average, past 3 years) 20.6%
Cash / Debt $475.4 million / $640.2 million
Dividend Yield 1.2%
Competitors 3M
Purification

Siemens
Water Technologies

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 13% of the 158 members who have rated Pall believe the stock will underperform the S&P 500 going forward.

Just last week, one of those bears, All-Star bradford86, touched on the stock's seemingly unsustainable valuation:

Pall is shooting into all-time highs. Sell it. Target: $47-$55. I think that any upside left in Pall Corp is simply a function of the company surpassing all-time highs and running into overvaluation. Justifying a price of $60 or over is a fools game. Pall has a buyback on the table and I certainly hope that they have taken it offline for now, but I can't confirm that and for the most part companies love buying back their stock at higher prices. Trading at 18x FY 2012 guidance, I am going to recommend that you sit out on this one for a short while and try to get back in and a better price.

What do you think about Pall, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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