JEC has bottomed over the past five months with the 200-day moving average acting as a curving neckline. Notice how the 200-day has capped the rallies since August.
Two positives are the rising 50-day moving average and the uptrend in the On-Balance-Volume line. The rising On-Balance-Volume line has foreshadowed the price action. The Moving Average Convergence Divergence (MACD) oscillator is above zero and rising -- a bullish setup.
Traders could go long on JEC here with a sell-stop at $39 and add to longs on a close above $45.
TheStreet Ratings team rates JACOBS ENGINEERING GROUP INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate JACOBS ENGINEERING GROUP INC (JEC) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 40.4% when compared to the same quarter one year prior, rising from $64.84 million to $91.06 million.
- JEC's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JEC has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- 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 Construction & Engineering industry and the overall market on the basis of return on equity, JACOBS ENGINEERING GROUP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The gross profit margin for JACOBS ENGINEERING GROUP INC is rather low; currently it is at 17.94%. It has decreased from the same quarter the previous year.
- Net operating cash flow has declined marginally to $282.57 million or 2.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: JEC