Is the long-awaited economic lift from the federal government's trillion-dollar infrastructure bill finally coming to fruition? If the steel products maker and IBD 50 member Commercial Metals is any indication, maybe so. Commercial Metals stock is forming a base with a 46.78 entry with its fiscal third quarter report slated for the morning of June 16.
The Irving, Texas-based company continues to put up outstanding numbers. Last quarter it reported a 132% leap in earnings to $1.53 per share on a 37% rise in revenue to $2.01 billion. This latest base is a second-stage consolidation, a bullish indicator. Bases that are early stage (stages 1 and 2) are more apt to succeed than later stage bases.
Commercial Metals Stock Ratings Shine
Commercial Metals stock has a near-best 98 Composite Rating, of 99, and earns the No. 3 rank among its peers in the Metal-Fabricators industry group. Insteel Industries is the No. 1-ranked stock in the group. And Northwest Pipe is No. 3 in the group. Reliance Steel & Aluminum is also in the top five of the group.
Commercial Metals makes steel and other metal products and provides materials and services for the construction industry and other sectors. It has a top-notch 99 EPS Rating. And Commercial Metals stock has a 93 Relative Strength Rating, putting it in the top 7% of stocks in terms of price performance over the past year. Its relative strength line, which compares a stock's performance vs. the S&P 500, is at the highest point since the start of 2017.
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In addition to the 132% EPS pop last quarter, the company reported earnings grew 76%, 59% and 179% the three quarters before that. Over that same period, sales grew 38%, 44% and 42% before last quarter's 37% gain.
Analysts Expect 85% Profit Growth
Consensus analyst estimates call for 85% earnings growth for the fiscal third quarter, and a 113% gain for the full year.
It's important to note that buying a stock just ahead of earnings can be risky since you typically don't have enough time to establish a profit cushion before the latest quarterly numbers come out. Commercial Metals stock is a good candidate for a stockwatch list though before its earnings report next week. CAN SLIM investors follow sound buy and sell rules to minimize exposure.
Note: Dates for earnings reports are subject to change. Check the company's website for any updates.
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