Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified Emerson Electric ( EMR) as a momo momentum 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 $199.5 million.
- EMR has a PE ratio of 31.7.
- EMR is currently in the upper 30% of its 1-year range.
- EMR is in the upper 25% of its 20-day range.
- EMR is in the upper 35% of its 5-day range.
- EMR is currently trading above yesterday's high.
- EMR has experienced a gap between today's open and yesterday's close of 0%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills. EXCLUSIVE OFFER: Get the inside scoop on opportunities in EMR with the Ticky from Trade-Ideas. See the FREE profile for EMR NOW at Trade-Ideas More details on EMR: Emerson Electric Co., a diversified technology company, engages in designing and supplying products and technology, and providing engineering services and solutions to the industrial, commercial, and consumer markets worldwide. The stock currently has a dividend yield of 2.5%. EMR has a PE ratio of 31.7. Currently there are 5 analysts that rate Emerson Electric a buy, no analysts rate it a sell, and 16 rate it a hold. The average volume for Emerson Electric has been 3.1 million shares per day over the past 30 days. Emerson Electric has a market cap of $46.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.30 and a short float of 1.6% with 3.71 days to cover. Shares are up 22.7% year to date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Emerson Electric as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Compared to its closing price of one year ago, EMR's share price has jumped by 34.56%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EMR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.08, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $995.00 million or 17.61% when compared to the same quarter last year. In addition, EMERSON ELECTRIC CO has also modestly surpassed the industry average cash flow growth rate of 13.80%.
- 42.81% 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. Regardless of the strong results of the gross profit margin, the net profit margin of 3.05% trails the industry average.
- EMR, with its decline in revenue, underperformed when compared the industry average of 8.8%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full Emerson Electric Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.