Primo Water: Visibility For Recession-Resilient Growth

Dec. 05, 2022 7:25 PM ETPrimo Water Corporation (PRMW), PRMW:CACOST
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Ahan Analytics
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Summary

  • Primo Water Corporation has created a recession-resilient business that makes the stock a top pick for me for 2023.
  • Pricing power, tariff tailwinds, operational efficiencies, a 5-year Costco deal, and more combine to bolster the odds that Primo Water can achieve its bullish multi-year guidance.
  • Recent performance demonstrates the good odds that the company can retain multi-year visibility into future performance which in turn translates into investor confidence.

Man carrying water bottle and people at water cooler

Pixland/Pixland via Getty Images

As I had hoped by this time, Primo Water Corporation (NYSE:PRMW) is starting to break out as the company appears to prove it is on track to hit ambitious forecasts and beyond. Strong Q3

Strong secular trends for bottled water support sustained tailwinds for Primo Water Corporation.

Strong secular trends for bottled water support sustained tailwinds for Primo Water Corporation. (Primo Water Corporation)

Primo Water's EBIDTA is on a promising uptrend.

Primo Water's EBITDA is on a promising uptrend. (Seeking Alpha)

EBIDTA margins experienced a strong breakout.

EBITDA margins experienced a strong breakout. (Seeking Alpha)

Primo Water Corporation (<a href='https://seekingalpha.com/symbol/PRMW' title='Primo Water Corporation'>PRMW</a>) has sustained a bullish 200DMA breakout since reporting Q3 2022 earnings.

Primo Water Corporation has sustained a bullish 200DMA breakout since reporting Q3 2022 earnings. (TradingView.com)

This article was written by

Ahan Analytics profile picture
4.53K Followers
Dr. Duru has blogged about financial markets since the year 2000. A veteran of the dot-com bubble and bust, the financial crisis, and the coronavirus pandemic, he fully appreciates the value in trading and investing around the extremes of market behavior. In this spirit, his blog "One-Twenty Two" (https://drduru.com/onetwentytwo/) delivers a different narrative for students and fans of financial markets. Dr. Duru challenges conventional market wisdoms and offers unique perspectives. The blog posts cover stocks, options, currencies, Bitcoin, and more, while leveraging the tools of both technical and fundamental analysis for short-term and long-term trading and investing. Some of these ideas and analyses are also featured here on Seeking Alpha.Dr. Duru received a B.S. in Mechanical Engineering (and an honors degree in Values, Technology, Science and Society - now simply STS) from Stanford University. For graduate studies, Dr. Duru went on to earn a Ph.D. in Engineering-Economic Systems (now Management, Science, and Society). Dr. Duru's work experiences include:*Independent consulting in operations research and decision analysis*Management consulting in product development and technology strategy*Price optimization software for computer manufacturers and internet advertising (including a shared patent for methodology)*Business Intelligence and Data Analytics, including some Data Science and Data EngineeringConsulting practice: https://ahan-analytics.drduru.com/

Disclosure: I/we have a beneficial long position in the shares of PRMW either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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