The stock of this manufacturer of water heaters and boilers recently rose above its 50-day moving average, a bullish indicator.
A.O. Smith (AOS)
From 2 for 1 Stock Split Newsletter
A.O. Smith (AOS) announced its 2 for 1 split way back in September and was passed over with relatively low scores compared to the other candidates at the time. The price has slipped just a bit since the split was delivered in October. That, and other factors, have improved its ranking score but, truth be told, the score is still not as high as our average monthly pick. I’m going to overlook that for these reasons.
AOS is a money-making machine. It was one of the most successful stocks ever included in the 2 for 1 portfolio during our ownership between 2010 and 2015. AOS split again while we owned it and went to the bottom of the ladder. Our net return over five years was 33% annualized.
The growth of this company has not slowed in the interval since our sale and company and analyst projections suggest continued upward momentum can be expected.
With this success comes greater visibility, with more analysts covering the company and a well above average measure of volatility in the stock price. These factors are big contributors to the lower ranking score and they are not to my liking, but it’s still reasonable to conclude A.O. Smith can continue its run for a few more years.
Neil Macneale, 2 for 1 Stock Split Newsletter, www.2-for-1.com, 408-210-6881, January 2017