With the pandemic waning and prospects rising for friendlier interest rates later this year, the industrial sector may be poised for growth. After languishing for most of 2022, shares of transportation systems equipment provider Wabtec have climbed this year. On Thursday, the Relative Strength (RS) Rating for Wabtec stock jumped into a higher percentile, rising from 65 to 71.
The upgraded 71 RS Rating means Wabtec stock outperformed 71% of stocks in terms of price performance over the past 12 months. The best-performing stocks often have an RS Rating north of 80 in the early stages of their moves. See if Wabtec can continue to rebound and clear that threshold.
Looking For Winning Stocks? Try This Simple Routine
Wabtec Stock Among Top 25%
Other ratings for the Pittsburgh-based company paint a rosier picture. For example, its 78 Earnings Per Share Rating shows some earnings strength. Similarly, the company's 78 Composite Rating shows it's performing in the top quartile of stocks on a combined rating for IBD's other five key ratings. On the downside, Wabtec has a D+ Accumulation/Distribution Rating, on an A+ to E scale. The D+ rating indicates that big money investors — mutual funds, ETFs and the like — are selling more shares than buying. Look for that rating to improve to a C or better.
Meanwhile, Wabtec stock is building a flat base with a 107.96 buy point. See if it can break out in volume at least 40% above average. It bottomed at 79.33 at the end of September and rose to an intraday high 107.86 on March 6. It's consolidated from there and traded around 97.41 Thursday afternoon, up fractionally for the day and up about 23% from the September low.
Wabtec designs and sells equipment for railroad locomotives and rail cars, as well as for passenger transit vehicles such as electric buses. In mid-February management said they expect adjusted earnings of $5.15 to $5.55 this year, on $8.7 billion to $9 billion revenue.
Transportation Numbers Key For Wabtec
Wabtec stock prospects are improving in sync with transportation industry prospects, especially for truckers. The truck transportation group ranks a solid No. 46 on IBD's list of 197 industry groups. That's much improved from a 70 rank for truckers a month ago and an 83 rank six months ago. The railroad group has improved its position on the list too, but not as much as truckers.
In terms of fundamentals, Wabtec's EPS growth rate rose over the last two quarters. Top line growth has also moved higher over the same time frame. Last quarter, earnings rose 13% to $1.28 per share. Revenue grew 14% to $2.19 billion.
Wabtec stock holds the No. 2 rank among its peers in the Transportation-Equipment Manufacturing industry group. Wabash National is No. 1 and Twin Disc is No. 3 among the group's highest-rated stocks.
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 measures price performance with a 1 (worst) to 99 (best) score. The grade shows how a stock's price behavior over the trailing 52 weeks compares to all the other stocks in our database.
Please follow James DeTar on Twitter @JimDeTar
