Ratings company Moody's gets pretty high marks itself. On Wednesday the IBD Relative Strength Rating for Moody's stock jumped from 80 to 83. Market research shows that the top-performing stocks tend to have an 80 or higher RS Rating in the early stages of their moves.
The 83 RS Rating upgrade comes ahead of its fourth quarter earnings on Thursday. The revised rating shows that Moody's stock topped 83% of all stocks for price performance over the past 52 weeks. Other key ratings for the New York-based research and analysis firm are even higher.
Moody's No. 1 In Its Industry
No. 1 ranked company its industry, Moody's has a terrific 96 Composite Rating out of 99. The Composite score combines five separate proprietary ratings into one. The best growth stocks have a Composite Rating of 90 or better. It also has a strong 88 EPS Rating and a best-possible A SMR Rating (sales + profit margin + return on equity) on an A-to-E scale.
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Moody's stock has been a Steady Eddie performer, rising steadily over the years. During the 2008-09 recession, it dropped to a 15.41 low. A year ago, on Feb. 14, it traded at 363.49. And Wednesday afternoon it was trading above 504, down for the day but up 38% in the last year.
MCO stock broke out of a cup-without-handle base on Jan. 31 but it hasn't risen from the 503.94 entry yet. It could be forming a handle to complete a cup with handle. One thing to note is that it's a first stage base because it undercut the low of the prior base, resetting its buy point. Early stage bases are more prone to succeed than third and fourth stage bases.
Earnings grew 32% last quarter to $3.21 per share on a 23% rise in revenue to $1.81 billion. The prior three periods its EPS climbed 37%, 13% and 43%. Sales growth quickened every quarter this past year from 8% to 15%, 21%, 22% and the 23% pop last quarter.
Earnings Due On Thursday
The company says on its website it will release fourth quarter and full-year results Thursday morning. Analysts polled by FactSet expect a 19% increase in EPS this quarter on 15% higher sales. The number of funds holding Moody's shares rose from 2,567 last June to 2,704 in December.
Moody's earns the No. 1 rank among its peers in the 15-stock Commercial Services-Market Research industry group. S&P Global and Thomson Reuters are also among the group's highest-rated stocks.
IBD's proprietary Relative Strength Rating identifies share price performance with a 1 (worst) to 99 (best) score. The grade shows how a stock's price movement over the last 52 weeks stacks up against all the other stocks in our database.
Please follow James DeTar on Twitter @JimDeTar
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