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Trade-Ideas LLC identified
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Emerson Electric as such a stock due to the following factors:
- EMR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $167.2 million.
- EMR has traded 279,160 shares today.
- EMR is trading at 1.74 times the normal volume for the stock at this time of day.
- EMR crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on EMR:
Emerson Electric Co., a diversified technology company, designs and supplies products and technology, and delivers engineering services and solutions to the industrial, commercial, and consumer markets worldwide. The stock currently has a dividend yield of 2.6%. EMR has a PE ratio of 24.6. Currently there are 6 analysts that rate Emerson Electric a buy, no analysts rate it a sell, and 9 rate it a hold.
The average volume for Emerson Electric has been 2.6 million shares per day over the past 30 days. Emerson Electric has a market cap of $47.1 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.29 and a short float of 1.2% with 3.33 days to cover. Shares are down 3.9% year-to-date as of the close of trading on Friday.
rates Emerson Electric as a
. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- 43.84% is the gross profit margin for EMERSON ELECTRIC CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.41% is above that of the industry average.
- EMERSON ELECTRIC CO reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EMERSON ELECTRIC CO increased its bottom line by earning $2.76 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($3.75 versus $2.76).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.0%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- EMR's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.93 is weak.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electrical Equipment industry and the overall market, EMERSON ELECTRIC CO's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full Emerson Electric Ratings Report.