Emcor Group is Thursday's pick for IBD 50 Growth Stocks To Watch as the building services stock is winding up for its next move in a bullish pattern. Emcor stock was down fractionally Thursday morning.
The company provides construction, building and industrial services covering electrical, mechanical and security needs.
The industrial stock ranks No. 1 out of 13 names in the Building Maintenance and Services group, which holds the No. 25 spot out of 197 industry groups followed by Investor's Business Daily. Emcor stock also sits on the coveted IBD Big Cap 20.
Emcor Stock Ready To Pounce
Shares formed a three-weeks-tight pattern and are on pace to extend the pattern for a fourth straight week of narrow closes. A buy point of 532.38 can be seen, which is also its all-time high reached on Nov. 21, according to IBD MarketSurge.
The pattern formed after shares topped a 20% profit zone of an irregular base with a 401.98 buy point. But volume on Emcor stock has been drying up as it awaits a catalyst for its next climb.
The stock's 95 Relative Strength Rating is supported by its impressive 137% gain so far this year.
Robust Profit Growth Looks To Slow
Emcor reported higher-than-expected third quarter adjusted earnings but lower sales than views on Oct. 31. It also increased its full-year 2024 profit outlook.
Profit grew 61% on a 15% sales lift. Quarterly earnings growth has been robust, and reached 80% three quarters ago, but the rapid pace is expected to fade. Current quarter forecasts call for a 29% increase, then tapering to 4% over the next four quarters.
Revenue growth is also slowing, with fourth quarter sales projected to rise 11% then slide to 6% over the same time period. FactSet estimates show 57% profit growth in 2024 and a more modest 8% in 2025.
Mutual funds have been piling into Emcor stock with 1,554 owning shares in September, up from 1,479 in June and 1,015 in March. Its beefy Up/Down Volume Ratio of 2.0 indicates strong demand for the stock over the last 50 days.
The building services stock holds a best-possible IBD Composite Rating of 99 and a hefty 98 Earnings Per Share Rating.
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