Building Materials supplier Masco trending higher behind solid earnings growth
Masco Corp (NYSE: MAS) manufactures and distributes home improvement and building products. The company’s plumbing product line includes Delta Faucets, Peerless, Hot Spring, and Elan as well as others. The Decorative Architectural Product line includes the brand names of Behr, Kilz, and Franklin Brass. The Cabinetry line includes Kraftmaid, Cardell, and Merrillat. Masco is headquartered in Livonia, Michigan and was founded in 1929.
The stock has been trending higher since December and is up over 50% since then. Strong earnings growth has helped the stock move higher. Masco has seen earnings grow by 24% per year over the last three years and they were up by 16% in the most recent quarterly report.
The company’s return on equity is a little questionable with both the Wall Street Journal and Investor’s Business Daily not showing an ROE while Yahoo Finance shows one that is ridiculous at 789%. Excluding that indicator, the return on assets is at 13.95%, the profit margin is 13.1%, and the operating margin is 15.04%
The Tickeron SMR rating for Masco is 1 and that indicates very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 2 indicates that Masco is seriously undervalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. Masco is currently trading at a P/E ratio of 16.74 and that is well below the average stock in the industry.
Looking at the chart for Masco we see how the stock has rallied off the December low. You can also see how a trend channel has formed over the last four months with the lower rail connecting the lows from June and August while the upper rail connects the highs from July and September. The gap higher in July did push the stock through the upper rail for a day, but then the stock slipped back.
One of the more encouraging signs for Masco for me was the bullish crossover from the daily stochastic readings on September 26. In each of the last three instances where the indicators have been in oversold territory and made a bullish crossover the stock has rallied over 14% within the next month or two.
We also see that the stock crossed above its 50-day moving average toward the end of August and appears to be using the trend line as support at this time.
Turning our attention to the sentiment toward Masco, there are 16 analysts covering the stock currently with 10 “buy” ratings and six “hold” ratings. This puts the buy percentage at 62.5% and that is below the average buy percentage. What is really interesting about Masco is how the ratings have changed. Just three months ago there were 21 analysts covering the stock and there were 18 “buy” ratings and only three “hold” ratings, putting the buy percentage at 85.7%. This suggests that not only is the buy percentage below average, but analysts have become considerably less bullish as the stock has rallied.
The short interest ratio for the stock is currently at 2.4 which is slightly below average and indicates slightly more optimism than the average stock. The short interest did drop from the end of August through the first half of September.
Masco is set to announce earnings again on October 30. The report will be worth keeping an eye on as it was earnings that created the big gap higher in July and the big gap lower in April.
MAS in upward trend: price may jump up because it broke its lower Bollinger Band on March 11, 2025
MAS may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 32 cases where MAS's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where MAS advanced for three days, in of 334 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on March 10, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on MAS as a result. In of 90 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for MAS turned negative on February 05, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at .
MAS moved below its 50-day moving average on February 27, 2025 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for MAS crossed bearishly below the 50-day moving average on February 28, 2025. This indicates that the trend has shifted lower and could be considered a sell signal. In of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
The 50-day moving average for MAS moved below the 200-day moving average on March 12, 2025. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MAS declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for MAS entered a downward trend on March 10, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. MAS’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: MAS's P/B Ratio (164.420) is very high in comparison to the industry average of (9.777). P/E Ratio (19.326) is within average values for comparable stocks, (38.098). Projected Growth (PEG Ratio) (1.887) is also within normal values, averaging (3.657). Dividend Yield (0.015) settles around the average of (0.020) among similar stocks. P/S Ratio (2.204) is also within normal values, averaging (2.291).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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General Information
a manufacturer of building and home improvement products
Industry BuildingProducts