With the federal infrastructure bill putting billions of dollars into U.S. construction projects, equipment giant Caterpillar is sitting pretty. The housing sector is on the upswing too, enabling the construction and mining equipment maker to put up some dazzling numbers. Its earnings growth rate accelerated from 22% four quarters ago to a whopping 70% rise last quarter. Strong sales growth led the way. On Thursday, the IBD Relative Strength (RS) Rating for Caterpillar stock climbed from 62 to 71.
The upgraded 71 RS Rating shows that Caterpillar stock price outperformed 71% of all other stocks this past year. The RS rating lift puts Caterpillar within shooting distance of a key benchmark. Market research shows that the market's biggest winners tend to have an RS Rating over 80 in the early stages of their moves. See if the watchlist candidate can rise into that elite group. Caterpillar is moving in the right direction and its other ratings are already top-notch.
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Caterpillar Stock Ratings Shine
The Irving, Texas-based company boasts a 90 Composite Rating showing it's a top performer for the most important fundamental and technical metrics. Its Earnings Per Share Rating is also a 90, reflecting strong recent and long-term profit growth.
Additionally it has a top-notch A SMR Rating (sales + profit margins + return on equity) on an A-to-E scale. Its C Accumulation/Distribution Rating shows that funds are buying about as many of its shares as they collectively are selling. However, the number of funds holding its stock rose from 2,584 in September to 2,717 in December and 2,790 in March, a bullish sign.
Caterpillar stock is building a consolidation with a 266.14 entry. See if the stock can break out in volume at least 40% above average. Amid prospects for further growth, investors have bid its shares up about 32% from a 160.60 intraday low at the end of September. On Thursday, Caterpillar fell fractionally to 234.45.
Earnings Growth Rate Rising
Earnings grew 70% last quarter to $4.91 per share. The prior three stanzas its EPS grew 22%, 48% and 43%. Sales rose 17% to $15.9 billion last quarter, at least its fourth quarter in a row of double-digit sales growth.
Caterpillar stock holds the No. 2 rank among its peers in the Machinery-Construction/Mining industry group. Rival construction gear maker Terex is No. 1 in the group. Manitowoc, a maker of cranes and other lifting equipment, 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.
This exclusive rating from Investor's Business Daily identifies market leadership with a 1 (worst) to 99 (best) score. The grade shows how a stock's price behavior over the trailing 52 weeks stacks up against all the other stocks in our database.
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