Dow Jones giant caterpillars (CAT) led five construction-related stocks near buying points that would benefit from increased infrastructure spending. Flowers for rent (URI), Terex (document), Deere (DE) and Materials Martin Marietta (MLM) also gives a list of stocks to watch for next week.
X
All companies will see a boost from the recent infrastructure bill and the Inflation Reduction Act. The infrastructure spending plan, approved last fall, will allocate more than $500 billion to various projects. And the Inflation Reduction Act includes $369 billion to expedite renewable energy infrastructure and mining projects.
Meanwhile, the market is in a confirmed uptrend as Nasdaq holds above its 50-day moving average and the S&P 500 tests its 200-day line.
Caterpillar Stock
Caterpillar is a recent IBD shares of the day and it leads the Construction/Mining Corporation under Check IBD Stocks. The construction giant has recovered nearly 50% since bottoming in late September, and has seen solid revenue and earnings growth over the past two quarters.
CAT stock is nearing a 238 buy point for cup base. The stock boomed on November 11 but then pulled back and fell slightly below the 21-day exponential moving average. That can serve as a constructive shake-up. The recent sideways action could be seen as a countermeasure to a long-term consolidation from June 2021, showing a level of 239.95 buy points. In another week, that handle could be a flat background, with that 239.95 entry.
CAT stock is 7.6% above its rapid rise 50-day moving average.
Caterpillar has a Composite Rating of 95, which combines several technical indicators into a single score with a maximum score of 99. CAT stock’s Relative Strength Line is lower than its peak since early November. But it maintains a strong 91 RS Rating, meaning the stock has outperformed its peers by 91% in the market. And Caterpillar has 85 EPS Rating as its earnings results pick up momentum.
Flowers for rent
United Rentals is Tuesday IBD shares of the day and be a member of the quarter IBD Rankings Watchlist of top growth stocks. Earnings growth for the world’s largest equipment rental company has fluctuated over the past seven quarters, averaging around 40% during that time. Revenue increased by an average of 20.2% during that period.
URI stock is up 36% after recovering from a September low and is down about 4% from a 52-week high.
The stock is in a year-long consolidation with a buy-with-handle of 368.04. URI stock could have an early entry opportunity above Friday’s high of 363.47.
United Rentals leads the Commercial Rental Services Group in IBD Stock Checks. URI stock has a perfect 99 Composite Rating and a near perfect EPS Rating of 96. shares’ relative strength line close to their highest of the year and United Rentals has an RS Rating of 91.
The Economy, S&P 500 Faces a Hard Landing – Unless the Fed Do This
Terex Securities
Machine builder and material handler Terex ranks third in the Construction/Mining Group by the IBD Stock Checkup. The company’s earnings and sales grew 79% and 13% respectively in the most recent quarter after three periods of acceleration and deceleration.
TEX stock is consolidating after the following strong rally overate from its cup base in late October. The stock is up about 13% from the model’s 38.41 buy point. TEX stock has fallen more than 6% since mid-November, which could be seen as a countermeasure to a major consolidation run from the start of the year. In that case, a larger consolidation has an entry point of 46.57. The handle could become its own flat base in a week.
Terex fell 5.5% to 43.52 last week, closing Friday below the 21-day line for the first time since Oct.
TEX stock relative strength line near year high and it has an impressive 93 RS Rating. Terex has 90 Overall rating. However, earnings decline in 2020 puts the company’s EPS Rating at 66.
Shares Deere
Agricultural equipment manufacturer Deere heads IBD’s Farm-Machinery Group. Deere’s revenue has grown steadily over the past three quarters. And earnings saw two consecutive periods of growth decelerating before surging 81% with the most recent results.
Deere’s stock has recently been even greener than the company’s tractors. Stocks are rallying after a strong rally in late September. DE stock has broken its value cup base with handle 11 and up more than 8% from a 406.2 buy point. With Friday’s pullback, DE stock fell 2.4% to 434.81, miss aa tight pattern for three weeks. But stocks are still trading closely.
Ideally, DE stock will move sideways, letting the 21-day and even 50-day lines catch up as it forms a new base.
Deere stock has performed 94% better than its peers on the stock market year-to-date, and its RS Rating is 94. DE stock has an excellent EPS Rating of 96 after just showing. reported a one-quarter decline in the last eight periods. And Deere has a perfect 99 Composite Rating.
Martin Marietta . Stock
Martin Marietta in the Construction-Cement/Concrete/Aggregate industry group, led by eagle material (experience). The concrete and building materials supplier is down 19% from its share price year-to-date, but started to recover in early summer.
Martin Marietta’s earnings fell 61% in the first quarter but they improved to 4% and 10% growth in the second and third quarters, respectively. Meanwhile, revenue growth slowed from 27% growth in the first quarter to 16% growth in the past four quarters for Martin Marietta.
MLM is forming cup with handle base “bottomed out”. Shares rallied to 365.15 in mid-August from a July low of 296.05 before falling back to form a cup-with-handle pattern.
The base currently has a buy point of 371.57 at its peak, which was formed when Martin Marietta stock dropped a little more than 1% over the past three weeks. MLM stock is holding above its 21-day line.
MLM stock has a Composite Rating of 86 and an EPS Rating of 86. However, the stock is only in the top half of the market performer this year with a 64 RS Rating.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
YOU MIGHT ALSO LIKE:
See the stocks in the top list near the buy point
Short-term trades can generate great profits. IBD SwingTrader shows you how
See IBD investment strategies for actionable market insights
