When might a 134-year-old company be called a growth company? When it's putting up dazzling growth numbers and keeps reinventing itself. A good example is Emerson Electric, once a staid maker of sewing machines and power tools that today is a leading engineering and product design firm. On Thursday the Relative Strength Rating for Emerson Electric stock shot up 21 points 63 to 84.
Emerson Stock Upgrade Puts It In Elite Group
The upgraded 84 RS Rating means that Emerson stock outpaced 84% of all stocks for price performance over the past year. History reveals that the best-performing stocks often have an RS Rating north of 80 as they begin their biggest climbs.
Among its other key ratings, Emerson stock has a respectable 89 Composite Rating out of 99, and a stellar 92 Earnings Per Share Rating. Reflecting strong fundamentals, it boasts an A SMR Rating (sales + profit margins + return on equity) on an A-to-E scale with A the best.
Additionally, it has a B Accumulation/Distribution Rating, showing that mutual funds, university funds and the like are fairly heavy buyers of its stock. On top of that, the number of funds holding Emerson shares rose from 2,337 last June to 2,412 in December.
On Wednesday Emerson reported fiscal first quarter results and its stock popped 10.4% on the stock market today amid its continued strong earnings growth. It closed at its highest price since the beginning of September 2021. On Thursday it gave back a small part of that gain. In Thursday afternoon trading Emerson stock traded above 102, down about 1.6%.
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St. Louis-based Emerson Electric is now considered extended and out of buy range after clearing a 98.09 buy point in a first-stage cup with handle. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week line.
4 Quarters Of Double-Digit Profit Growth
Top and bottom line growth moved higher in the company's most recent quarter. Earnings were up 56% to $1.22 per share, on a 22% hike in revenue to $4.12 billion. The prior three periods Emerson's earnings grew 25%, 40% and 21%. Not spectacular, but steady, strong growth. Revenue rose 14%, 14% and 5% during that period.
Emerson Electric earns the No. 6 rank among its peers in the 23-stock Diversified Operations industry group. Eaton is No. 1 in the group and Berkshire Hathaway is No. 2 among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
This unique Relative Strength Rating measures market leadership by using a 1 (worst) to 99 (best) score that indicates how a stock's price performance over the last 52 weeks matches up against the rest of the market.
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