Wednesday's IBD 50 Stocks To Watch pick, Emcor, is one of the best stocks to buy and watch right now, with corporate earnings accelerating to 67% in the latest quarter. EME stock traded 0.3% lower midday Wednesday, still above its latest buy point.
Emcor specializes in mechanical, electrical, plumbing, air-quality and fire-prevention systems. In 2022, U.S. mechanical construction services represented 39% of the company's revenue.
On April 27, Emcor surged 8.6%, breaking out past a 169.89 flat-base buy point after the company reported a 67% jump in quarterly profit to $2.32 a share vs. the year-ago period. Revenue increased 11% to $2.89 billion.
"The company posted record first quarter revenues reflecting solid year-over-year growth despite a challenging operating environment," commented CEO Tony Guzzi in the earnings report press release.
Guzzi continued, "Strong demand for our services across several resilient non-residential market sectors, and from the majority of our reportable segments, drove revenue growth of 11.5% during the quarter."
Emcor Earnings Accelerate
With accelerating earnings growth over the last four quarters, and a solid long-term track record of profitability, EME stock shows a near-perfect 97 Earnings Per Share Rating, according to IBD Stock Checkup. This rating takes into account EPS growth and stability of earnings over the past three years. The two most recent quarters are weighted more heavily.
Over the past four quarters, Emcor's profit growth accelerated from 12% to 17% to 39% to 67%. Accelerating earnings growth is a bullish fundamental metric.
EME stock boasts a 98 out of a perfect 99 IBD Composite Rating, due to strong fundamentals in the latest quarter along with powerful price action in recent months. The IBD Composite Rating is designed to help investors easily gauge the quality of a stock's fundamental and technical metrics.
Emcor ranks No. 1 in IBD's 11-stock Building-Maintenance & Services industry group.
Construction Stock Leader Is One Of Best Stocks To Buy And Watch
Following the construction stock leader's April 27 earnings-fueled breakout past a 169.89 buy point, shares quickly formed a new flat base. This flat base has a 174.05 entry, per IBD MarketSmith chart analysis.
The stock broke out past that latest buy point on June 6 and is in the 5% buy zone that goes up to 182.75.
This construction stock has more going for it. EME stock boasts a strong relative strength line, reiterating that it is a stock market leader to watch. While the RS line is not yet quite at new highs, it is holding up well during the ongoing stock market pullback. Remember, the RS line measures a stock's price performance vs. the S&P 500 and is the blue line plotted on every IBD chart.
Strong fundamentals and technicals make EME one of the best stocks to buy and watch in today's stock market.
With the stock market in a confirmed uptrend, investors should be on the lookout for top stocks breaking out of basing patterns. Despite the ongoing stock market pullback, IBD recommends exposure in stocks at 60% to 80% of your portfolio, according to IBD's The Big Picture.
Best Stocks To Buy And Watch
Three recent IBD 50 Stocks To Watch picks, which are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Shoals Technologies | 25.00 | Trendline | |
| Ryanair | 108.90 | Tight area | |
| MongoDB | 386 | Trendline |
Source: IBD Data As Of June 28
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
