No. 1-ranked Comfort Systems USA has a recession-resistant business. It makes heating, ventilation and air conditioning systems. On Monday, Comfort Systems stock got an upgrade to its Relative Strength (RS) Rating, from 90 to a superb 95, out of 99.
Comfort Systems stock shot up 14.6% on Friday on an excellent earnings report.
The upgraded 95 RS Rating means that Comfort Systems stock outperformed 95% of all stocks, regardless of industry, over the past year on price performance. Market research shows that stocks that go on to make the biggest gains often have an 80 or higher RS Rating in the early stages of their moves. Comfort Systems stock is in that group of first-rate stocks.
Forming A Cup-Without-Handle Pattern
The IBD Sector Leaders stock is trying to complete a cup without handle with a 192.33 buy point. See if the stock can clear the breakout price in trade at least 40% higher than normal. It's a later-stage pattern, and investors should be aware that those involve more risk. Monday afternoon Comfort Systems stock was trading around 176.
The stock's relative strength line is in new high ground, a promising indicator ahead of a potential breakout.
During the hot weather Comfort Systems fixes air conditioners. Now that fall is here it's busy installing and repairing heating systems. Additionally, it keeps busy all year with ventilation systems.
An El Nino weather pattern is making for a cold winter on the West Coast. And the East is getting its usual cold weather, which augurs well for the Houston-based company's earnings and Comfort Systems stock.
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Comfort Systems stock holds the No. 1 rank among its peers in the Building-A/C & Heating Products industry group. Thermal management systems maker Modine Manufacturing is also in the top 5 of the group. So is water heating equipment maker A.O. Smith.
Among its other key ratings, Comfort Systems stock has a best-possible 99 Composite Rating.
The company also has a 98 Earnings Per Share Rating and a B- Accumulation/Distribution Rating on an A+ to E scale. The B- rating shows that institutional investors such as university funds and mutual funds are buying more of its shares than selling.
Big Money Funds Avid Buyers Of Comfort Systems
Additionally, the number of funds holding Comfort Systems stock has risen every quarter this year, from 574 in the December-ended quarter to 677 in September.
The company showed 64% earnings growth in its most recent report, to $2.74 per share. The prior three quarters its EPS rose 48%, 66% and 65%. Sales grew 23% to $1.38 billion last quarter continuing a string of double-digit growth.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength. IBD's proprietary Relative Strength Rating identifies market leadership by showing how a stock's price movement over the last 52 weeks measures up against that of the other stocks in our database.
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