What Happened?
Shares of electrical energy control systems manufacturer Powell (NYSE: POWL) jumped 5.9% in the afternoon session after it received a positive mention from CNBC's Jim Cramer.
On his “Mad Money Lightning Round” segment, Cramer recommended the stock as a "buy," likely boosting investor confidence in the company. The endorsement follows recent positive news from the company itself. On August 20, Powell Industries announced a $12.4 million investment to expand its production capacity, a move that signals the company is preparing for future growth and increased demand for its products.
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What Is The Market Telling Us
Powell’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 8.1% on the news that 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.
Powell is up 19.3% since the beginning of the year, but at $272.83 per share, it is still trading 22.6% below its 52-week high of $352.37 from November 2024. Investors who bought $1,000 worth of Powell’s shares 5 years ago would now be looking at an investment worth $10,131.
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