Emerson Electric (EMR) Is Today's Pre-Market Laggard Stock

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.

Trade-Ideas LLC identified Emerson Electric ( EMR) as a pre-market laggard 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 $213.0 million.
  • EMR traded 31,816 shares today in the pre-market hours as of 8:08 AM.
  • EMR is down 5.5% today from Friday's close.

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More details on EMR:

Emerson Electric Co. provides technology and engineering solutions to industrial, commercial, and consumer markets worldwide. It operates through five segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Commercial & Residential Solutions. The stock currently has a dividend yield of 3.2%. EMR has a PE ratio of 20.1. Currently there are 3 analysts that rate Emerson Electric a buy, 2 analysts rate it a sell, and 15 rate it a hold.

The average volume for Emerson Electric has been 5.3 million shares per day over the past 30 days. Emerson Electric has a market cap of $40.3 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.12 and a short float of 3.2% with 6.22 days to cover. Shares are down 3.9% year-to-date as of the close of trading on Friday.

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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 growth in earnings per share, increase in net income, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • EMERSON ELECTRIC CO has improved earnings per share by 15.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EMERSON ELECTRIC CO increased its bottom line by earning $3.03 versus $2.76 in the prior year. This year, the market expects an improvement in earnings ($3.66 versus $3.03).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Electrical Equipment industry average. The net income increased by 13.6% when compared to the same quarter one year prior, going from $462.00 million to $525.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength 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.
  • 43.53% 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 9.39% is above that of the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.71, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.

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