AGCO, a maker of agricultural tractors, sprayers and combines, recently reported outstanding sales and profit growth. It's the top ranked company in the agriculture equipment group, according to IBD Stock Checkup. On Tuesday, the Relative Strength (RS) Rating for AGCO stock rose to 74, up from 66.
The 74 RS Rating means AGCO stock tops 74% of all stocks on price performance. It's a decent rating but its other key ratings show underlying strength for the Duluth, Ga.-based agricultural equipment maker.
AGCO Stock, Other Ag Gear Makers, Outperform Market
Like its bigger cousins (by revenue) Deere and Kubota and others in the farm machinery group, AGCO has outperformed the market since last fall. Among its other key ratings AGCO sports a terrific 98 Earnings Per Share Rating, out of 99. The 98 rating puts AGCO in the top 2% of all companies for long-term and recent quarters profit growth. It also carries a 95 Composite Rating and a C+ Accumulation/Distribution Rating on an A+ to E scale. The C+ rating shows that big money investors like ETFs and mutual funds are buying more shares than selling.
The best-performing stocks typically have an RS Rating north of 80 in the early stages of their moves. See if AGCO can continue to show renewed price strength and clear that threshold.
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AGCO stock dipped to 88.55 in mid-July last year. Its stock has shot up about 46% in the intervening eight months. Its stock climbed nearly 5% Monday and Tuesday afternoon the farm implement maker traded at about 129, up more than 3%. While now is not an ideal time to jump in because it hasn't formed a definite pattern with a clear buy point, see if the stock is able to establish and enter a buying range in heavy trade.
Sales, Profits Rise Sharply
Taking a look at revenue and profit performance, AGCO posted rising EPS growth in each of the last two reports. Sales growth followed the same trajectory. In its most recent quarter AGCO reported a 45% surge in earnings to $4.47 per share, on a 24% rise in revenue to $3.899 billion. That was up from 32% EPS growth and 15% revenue growth the prior quarter.
Commenting on Q4 results, AGCO CEO Eric Hansotia said in the earnings news release, "Our farmer-first focus was highlighted by our fourth quarter results that not only delivered record net sales and operating margin, but also generated substantial free cash flow."
AGCO stock earns the No. 1 rank among its peers in the Machinery-Farm industry group. Diversified equipment maker Alamo Group is No. 2 and Deere No. 3. Lindsay is No. 4 and Kubota No. 5.
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 tracks share price action with a 1 (worst) to 99 (best) score. The score shows how a stock's price behavior over the last 52 weeks holds up against all the other stocks in our database.
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