Investor preferences have recently broadened out from the AI-driven tech sector to other markets, including construction. Shares of construction services company Aecom hit an all-time high in mid-February and almost immediately began forming a fresh cup-with-handle pattern. Aecom stock is approaching its high again, and is just below a new buy point. On Monday its Relative Strength (RS) Rating climbed 80, up from 69 last week.
History shows that the best stocks tend to have an RS Rating of at least 80 in the early stages of their moves. The company's other ratings buttress its growth prospects. Aecom stock boasts a 94 Composite Rating, putting it in the top 6% of stocks for a group of the most important fundamental and technical metrics.
It also has an 87 Earnings Per Share Rating, out of 99. And its B- Accumulation/Distribution Rating on an A+ to E scale shows fairly heavy buying of its stock by institutional buyers. Add to that a growing number of funds that own Aecom stock. The number rose from 779 in the December-ended quarter to 996 in March and 1,077 in June. Not surprisingly, the construction services industry group overall has an outstanding 92 Relative Strength Rating.
See How IBD Helps You Make More Money In Stocks
Dallas-based Aecom offers construction management and planning services to the transportation, facilities and environmental systems markets, among others.
Aecom stock is building a cup with handle with an 89.40 entry. See if the stock can clear the breakout price in volume at least 40% higher than normal. On Feb. 16 Aecom rose to an all-time intraday high at 92.16. It consolidated, dropping to a 76 low on May 25. It quickly formed a cup-with handle and reversed higher. Monday morning Aecom traded around 89, just a tad below the entry point.
The construction services company reported 11% EPS growth last quarter to 94 cents per share, on a 13% rise in revenue to $3.66 billion. The prior three quarters its EPS rose 10%, -6% and 11%. Sales growth rose every quarter over the past year, from 2% to 4%, 9% and then 13% last quarter.
Aecom stock holds the No. 7 rank among its peers in the 20-stock Building-Heavy Construction industry group. Sterling Infrastructure and Quanta Services are also 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 RS Rating tracks technical performance by using a 1 (worst) to 99 (best) score that identifies how a stock's price performance over the last 52 weeks matches up against other publicly traded companies.
Please follow James DeTar on Twitter @JimDeTar
