Wednesday's IBD 50 Stocks To Watch pick is construction leader Emcor, which is approaching a fresh entry from a flat base. Emcor stock is one of the best stocks to buy and watch right now.
Emcor specializes in mechanical, electrical, plumbing, air-quality and fire-prevention systems. In late April, the company reported first-quarter results that solidly beat expectations, with earnings up 80% and revenue 19% higher year over year. Emcor also raised its full-year 2024 outlook above estimates.
In the company's earnings news release, Chief Executive Tony Guzzi commented, "The company had an exceptional start to the year, sustaining momentum throughout the first quarter and setting records in key financial and operational metrics."
Guzzi continued, "Our confidence is reinforced by the significant year-over-year increase in our remaining performance obligations and a healthy project pipeline, all of which provide us with strong visibility into the remainder of the year and is reflected in our increased financial guidance for 2024."
For its upcoming second-quarter report, due out July 25, Emcor earnings are expected to rise nearly 27% year over year to $3.76 per share, according to IBD MarketSurge. Emcor earnings are expected to jump 22% for fiscal 2024, with another rise of 7% in 2025.
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Stocks To Buy: Emcor Nears Buy Point
Following an 81% advance from a cup-with-handle's 221.84 buy point, Emcor shares are finally offering a new entry. The stock is just shy of a flat base's 401.98 buy point, according to MarketSurge pattern recognition.
However, there are a few additional risks in the event of a breakout move. First, the company's upcoming earnings report offers little opportunity for the stock to create a profit cushion.
Further, the relative strength line is recovering after a sharp decline from late May's highs. It remains pretty far from its old highs, which would be a key flaw if the stock is able to break out.
Finally, the current flat base is a third-stage base. Later-stage formations are less likely to lead to powerful gains, and are more prone to failure.
Still, Emcor stock boasts a perfect 99 IBD Composite Rating, according to IBD Stock Checkup, due to strong long-term earnings growth and big price gains over the last two years.
The relative strength line is recovering after a sharp decline from late May's highs. It isn't at new highs yet, which is a flaw as the stock price hits new highs. Look for continued strength in the RS line to indicate confirmation of stock market leadership if the breakout move gains momentum.
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Other Best Stocks To Watch
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Carlisle Cos. | 430.21 | Flat base | |
| MercadoLibre | 1,792.05 | Cup with handle | |
| Palantir Technologies | 26.57 | Cup with handle |
Source: IBD Data As Of July 17, 2024
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