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Rockwell Automation's (ROK) fiscal 2019 performance will be supported by focus on productivity and favorable macroeconomic indicators despite global trade tensions.

For Immediate Release

Chicago, IL – October 25, 2018 - Stocks in this week’s article are Guess? Inc. GES, GTx Inc. GTXI, NCI Building Systems Inc. NCS, EMCOR Group Inc. EME and Mitek Systems Inc. MITK.

What Overvaluation? 5 Stocks with Rising P/E Are Good Buys

Wall Street is currently on a tumultuous ride thanks mainly to rising rate worries and this is causing corrections in some high-flying names. But this does not mean that investors should be stricken with overvaluation fears, dump stocks that have seen huge price rise lately and run after value picks only.

Though investors generally believe that the lower the P/E, the higher the value of the stock will be, there is more to this whole P/E or valuation story as not only low P/E, stocks with a rising P/E can also fetch solid returns.

Rising P/E: An Useful Tool

Generally, the price of a stock rallies on a rise in earnings. As forecasts for expected earnings move higher, demand for the stock should drive its price. After all, a stock's P/E gives an indication of how much investors are ready to shell out for every dollar of earnings. Thus, if the P/E of a stock is rising steadily, it means that investors are pinning their hopes on the company’s inherent strength.

Also, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/330534/what-overvaluation-5-stocks-with-rising-pe-are-good-buys

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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