S&P Global (NYSE: SPGI) – You are probably more familiar with S&P Global as Standard & Poor’s. The company was founded in 1860 and became Standard & Poor’s in 1941. The company was acquired by McGraw Hill in 1966 and changed the name in 2016.
While most investors are familiar with the index benchmarks like the S&P 500, the company also provides ratings and does extensive work with analytics. The company is headquartered in New York.
The average annual growth rate for the past three years is 22%.
Earnings grew by 26% on the report in July and analysts expect full year earnings growth of 24%.
The company will report earnings again on October 25.
Sales have been growing at a slower pace, but they have been consistent.
The average annual growth rate has been 7% over the last three years and they also grew by 7% in the most recent quarter.
Looking at the management effectiveness ratings the return on equity stands at 84.1% while the return on assets is at 20%. The profit margin is at 44.6% and the operating margin is at 45.9%. All of these measurements are well above average.
SPGI has been trending higher since the beginning of 2016, gaining over 160% at its peak just a few weeks ago. The stock has been moving higher within the confines of an upwardly sloped trend channel and the stock is just a tad below the lower rail at this time. The 52-week moving average is just under the current price and should act as a secondary support level. We also see that the stock is the most oversold it has been since late 2016 based on the 10-week RSI and the weekly stochastic readings.
Suggested strategy: Buy SPGI with a maximum entry price of $200. I would set a target of at least $260 over the next 12 months (for a potential return of 35% from current prices). I would also suggest a stop at $180.
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