What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Internet of Things company Emerson Electric (NYSE: EMR) jumped 3.4%. Is now the time to buy Emerson Electric? Access our full analysis report here, it’s free.
- Internet of Things company Vontier (NYSE: VNT) jumped 3.5%. Is now the time to buy Vontier? Access our full analysis report here, it’s free.
- General Industrial Machinery company Crane (NYSE: CR) jumped 3.5%. Is now the time to buy Crane? Access our full analysis report here, it’s free.
- Industrial & Environmental Services company ABM (NYSE: ABM) jumped 3.6%. Is now the time to buy ABM? Access our full analysis report here, it’s free.
- Medical Devices & Supplies - Diversified company CooperCompanies (NASDAQ: COO) jumped 3.2%. Is now the time to buy CooperCompanies? Access our full analysis report here, it’s free.
Zooming In On ABM (ABM)
ABM’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 10.4% on the news that the company reported mixed first quarter 2025 (fiscal Q2) results as its full-year EPS guidance slightly missed. On the other hand, ABM beat analysts' organic revenue and EBITDA estimates. Market sentiment may remain cautious, especially with cash flow still under pressure as the company works through its ERP system transition. Overall, this was a softer quarter.
ABM is down 3.3% since the beginning of the year, and at $49.45 per share, it is trading 15.6% below its 52-week high of $58.61 from November 2024. Investors who bought $1,000 worth of ABM’s shares 5 years ago would now be looking at an investment worth $1,302.
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