Makers of heating, ventilation and air conditioning gear may seem like an uninteresting bunch for investors. But a closer look reveals that some of the players in this realm can display healthy growth, such as HVAC player AAON stock.
AAON broke out of a flat base Thursday, surging past a buy point of 75.24 with a gain of more than 4%. AAON's chart looks strong for other reasons as well. Shares are at an all-time high. And AAON stock is Thursday's selection of IBD 50 Stocks To Watch.
The stock gained 47% in 2023, handily beating the S&P 500's 24% gain. But that does not mean its best growth phase is behind it. Investor's Business Daily's ratings show the stock still has room to grow.
In fact, the stock is a holding in the Vanguard S&P Small Cap 600 Growth exchange traded fund and the SPDR S&P Small Cap 600 ESG ETF. The Vanguard fund showed a 15% gain for 2023, or one third that of AAON.
AAON makes HVAC products used in homes and commercial buildings. They're used for controlling air quality, humidity and the environment in clean rooms, hospitals and data centers.
AAON Stock Has Had Steady Growth
Sales and earnings growth have been steady over the past five quarters. Third-quarter results on Nov. 6 showed that sales rose 29% to $312 million while earnings per share of 64 cents rose 88%. AAON stock rose above the 50-day moving average after the company's third quarter performance and have found support at the level in the current base.
Mutual funds own 62% of outstanding shares. More funds have been buying the shares in more recent weeks, going by the Accumulation/Distribution Rating of A-. The Columbia Small Cap Growth Fund (CMSCX) holds AAON stock.
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