Marsh & McLennan is Friday's IBD Stock Of The Day, as insurance broker and risk management services firm, MMC stock is forging a possible base amid the market correction, and gained ground Friday.
The New York City-based firm operates in 130 countries across the globe, offering risk management, insurance and consulting services. The company completed 20 acquisitions last year. In 2022, MMC's risk and insurance services business segment generated around 61% of the company's $20.72 billion total revenue in 2022.
On July 20, Marsh & McLennan reported better-than-expected second-quarter earnings and revenue. The insurance broker has averaged around 11% EPS growth over the past three quarters. Meanwhile, analysts predict earnings growing 18% to $1.39 per share in Q3 with revenue increasing 9% to $5.21 billion. For the full year, Wall Street forecasts 13% EPS growth and a sales increase of 6%.
So far in 2023, Marsh & McLennan has announced a slew of new acquisitions, including Israel-based reinsurance broker Re Solutions and the Philadelphia-based risk management firm Graham Company.
The broader IBD-tracked Insurance-Brokers industry group, including MMC stock, has narrowly outperformed the S&P 500 this year, collectively gaining more than 18%.
MMC Stock
Shares of Marsh & McLennan gained 1.3% to 194.22 during Friday's market action, jumping above its July 21 high of 194.16. MMC is working on its fifth week of tight trade, which should become a valid flat base at Friday's close. Shares are up 2.8% in August and 16.5% on the year vs. the S&P 50o index's 14.6% gain.
After Friday, investors could use 194.16 as the buy point for the flat base, according to MarketSmith analysis. The pattern has firm support at the stock's 21-day exponential moving average, as well as its 50-day line.
However with the market in correction, investors should not be necessarily making new buys. Instead, play defensive, be ready to cut individual holdings as needed, and build a watchlist of well-positioned leaders.
MMC stock has a Composite Rating of 95 out of 99 with a 86 Relative Strength Rating. Marsh & McLennan also has an EPS Rating of 92 out of 99. Its Relative Strength Rating is a solid 86.
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