AECOM Technology Corp. Estimates Continue to Rise

A stock that I have stumbled on recently in one of my price and volume scans has me quite excited that I have found a young gem that could turn into a monster stock.

The stock is Aecom Technology Corporation (ACM), a provider of construction management and planning services to the transportation, facilities and environmental markets. And these are the perfect markets to be in according to the growth in this outstanding company.

Earnings have been stellar, with EPS growth the past six quarters of 100%, 83%, 93%, 81%, 12%, and 59%. Sales over the past eight quarters have been just as impressive with growth of 46%, 37%, 26%, 26%, 21%, 23%, 15%, and 7%. Despite the growth in sales slowing a bit, the overall trend is extremely healthy.

This includes the 2008 and 2009 estimates which are expected to show EPS rising 29% and 19% those two years respectively. This current growth with those great estimates is the reason that fund ownership has gone from 45 funds four quarters ago to 68 currently. 68, however, is below the 74 funds that were involved the quarter before. However, those funds must not have been as strong as the fund sponsorship rating on IBD has improved to a B from a C previously.

Speaking of Investor’s Business Daily, this company has excellent ratings in the paper, with an EPS rating of 90, a Relative Strength rating of 89, a group RS rating of 63, an SMR rating of B—thanks to a 21% Return on Equity,—an accumulation/distribution rating of A, a composite rating of 90, and a timeliness rating of A. These are definitely very high marks for a young stock.

The EPS growth rate of 26% is the same number as the p/e which is in the middle of its 16-35 range making it a relatively reasonably priced stock—that with this stock is just going to get better. Especially, when it only has 3% debt to shareholder equity.

I use charts to time my buys when I go long and when it comes to this stock I would use a low volume move to the 50 and 200 day moving averages as a place to put my long. Or a breakout here on very strong volume would be a great place to go long if you prefer to invest with the momentum on your side. Either way, it is hard to go wrong on this stock, for now.

If funds start dumping it, however, I will not be afraid to leave. If the elephants are leaving, this mouse definitely doesn’t want to stick around.

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Disclosure: At time of publication, author is long Aecom Technology Corporation (ACM)

Comments

[Mountain Fist:]

Another great article! Watching this one closely!

2008 Jun 08 01:37 PM

[User 137954:]

nice to see more technical analysis here. keep up the good work!

2008 Jun 09 12:49 AM

[trimagna3:]

I can't find any confirmation of the earnings pct increases claimed in the article.

100%, 83%, 93%, 81%, 12%, and 59%?

Without the source, they seem wildly unlikely.

2008 Jun 09 07:46 AM

[johnknox:]

I agree with the author, very solid infrastructure company, I am also long this stock. Good analysis makes me feel better about my positon.

2008 Jun 09 11:48 AM

[Market Spec...:]

trim, try investors.com...daily graphs sub

2008 Jun 09 01:30 PM

[Joshua Hayes:]

without the source...highsly unlikely...what do you think I just make this up.

Grow up tri"usingyourbrain"mag...

Daily Graphs from Investors Business Daily.

"you ain't to bright there are ya boy."

2008 Jun 11 01:58 PM

[YOUR NUTZ!:]

I ALSO USE IBD. I BOUGHT IT BEFORE I SAW YOUR ARTICLE.I CONCUR WITH YOUR ASSESMENT ON THIS STOCK,

2008 Jun 21 11:19 AM