In a market that is selling off intensely, following big money may well be among the few winning strategies.
Utilities have been garnering some attention from institutional money managers and some of these defensive stocks have been rewarded with improving ratings.
American Water Works is one of those stocks, as it tries to get past a long cup base's buy point of 150.68. Shares cleared the 50-day moving average as the company headed into fourth-quarter results on Feb. 19 and rallied after the report. As of Monday's closing price, shares had gained 19% after earnings. The S&P 500 fell 9% during the same period.
IBD MarketSurge chart analysis tools also show that the base is an early stage one. A breakout from an early stage base can net higher gains.
Support From Funds
Funds have been lifting the stock, going by its best possible Accumulation/Distribution Rating of A+. The rating measures the price and volume data over the 13 most recent weeks. The Up/Down Volume Ratio of 1.4 also shows that the stock is in demand over the past 50 days. That is pretty impressive performance in a market that has been seeing heavy selling in recent weeks.
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The relative strength line which compares the stock with the S&P 500 also has risen sharply.
As a water utility company, American Water Works stock ranks second in Investor's Business Daily's utility water supply group, according to IBD Stock Checkup.
Fourth-quarter sales rose 16% to $1.2 billion while earnings growth reflected strong acceleration and increased 39% to $1.22 per share. Dividend growth was 8.1% for the year. The utility company maintained its midpoint earnings outlook of $5.70 per share for 2025.
American Water Works Fund Ownership
American Water Works' Relative Strength Rating has spiked from just 23 four weeks ago to 89. The Composite Rating of 97 is nearly ideal while the EPS Rating also stands at 89.
Mutual funds own 54% of outstanding shares. Also, in Investor's Business Daily's mutual fund index, the Franklin Growth Fund(FKGRX) holds shares of American Water Works stock.
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