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LivestreamMenu(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — This is the story of a 73-year old company that’s had a wild, transatlantic ride from its beginnings as a plumbing supply business in Virginia. Eventually, it landed in England and began a decadeslong run as a London-traded entity, followed by a recent return to the United States. It’s all capped off with an S & P 500 inclusion and a corporate rebirth back in Newport News, VA where it all began. Many investors do not know this name because of its history. We told you this company’s story back in 2025 , and now we’re revisiting it after a material positive turn in the fundamentals. When you think of Ferguson , I want you to think cool. Running water and air conditioning. They’re the largest supplier of components for plumbing and HVAC in the United States. The residential business grows with the housing market (not great!), but the industrial segment’s growth is attracting attention thanks to the data center explosion as well as other large projects in every sector of the economy. The fundamental thesis here is the “dual-trade” contractor — plumbers who also do HVAC work. Ferguson is taking both bites of the apple through these customers and their strategy is working. Jefferies has a buy rating on Ferguson Enterprises and just raised their price target to $289. That’s not the interesting part. What’s interesting is what they’re bullish on, and what they’re openly admitting is still broken. The residential business is soft. Traffic at fergusonhome.com was down 25% to 42% in consecutive months last fall. They know it, the company knows it, and the stock has been stuck in a range for the better part of a year because of it. Jefferies is buying it anyway. The thesis is straightforward. The residential drag is a housing problem, not a Ferguson problem. In the meantime, the company’s non-residential operation is picking up the slack and then some, with a pipeline of large capital projects building above already-strong growth rates. When housing eventually turns, Ferguson has a business firing on all cylinders ready to absorb that tailwind. The $289 price target implies roughly 18% upside from where the stock trades today. Whether you get there in a straight line is a different conversation entirely. Sean is going to fill you in on the latest earnings report which allowed the stock to kiss its 52-week high before pulling back. I’ll come in at the end with a look at the chart. Best Stock Spotlight: Ferguson Enterprises, Inc. (FERG) Sean — We wrote about Ferguson in July of 2025, shortly after we started writing this column and the stock is up 11.5% in total return since. The path was anything but a straight line. FERG fell off our list in March when it closed below its 200-day moving average — by less than half a percent. It rejoined in mid-April, dropped off again in mid-May on another hairline break of the 200-day and then spent all of June chopping back and forth without ever re-qualifying with real momentum. On Tuesday, the day after its earnings report, FERG was added back to our list. This is why momentum is hard in practice. We’ve been watching the stock for a year, sometimes we like it, sometimes we don’t. Price dictates view —don’t worry that we’re buying it after a 3% bounce post-earnings. It’s actually a good thing! There is an overwhelming number of buyers demanding shares from all corners of Wall Street. Hedge funds, institutions, RIAs, retail traders and brokers are all agreeing the stock looks good at this price. Usually there is wisdom in crowds and that’s why we’ve constructed this list the way we have. When we last wrote about Ferguson, the story was a stock recovering from a bad December 2024 earnings report. This time we’re writing about a jump post-earnings. Now to earnings. On Monday, Ferguson reported Q2 revenue of $8.8 billion, up 4.6% year over year (3.8% organic growth) and ahead of the roughly $8.7 billion consensus. Adjusted EPS of $3.39 grew 5.3% and beat the $3.30 estimate. Gross margin held at 31%, and adjusted operating profit rose 2.9% to $932 million. Through the first half, sales are up 4.2% to $16.2 billion and EPS is up 7%. Management raised full-year guidance to mid-single-digit sales growth (from low-to-mid) and lifted the bottom of the operating margin range to 9.5%-9.8%. The growth engine is non-residential. U.S. non-res revenue grew 8% with industrial up 18% and commercial mechanical up 15% driven by data centers, power generation, and pharma production. CFO Bill Brundage said on the call that open orders and backlogs are building above those growth rates and that large capital projects, currently mid-to-high single digits as a percentage of total revenue, should be a tailwind for the next couple of years. Ferguson is also in acquisition mode. The company has announced eight acquisitions this year representing about $1.4 billion in annualized revenue. FERG now trades around 21x forward earnings with sell side targets moved up across the board after recent earnings. The market spent five months keeping this stock off our list. An index inclusion and a beat-and-raise quarter is gearing the stock up for a trend renewal. Now here’s Josh on the technicals. Risk management Josh — A lot of the time we are writing about clear, defined uptrends in this column. This is not that. The moving averages we would typically rely upon are worthless in the case of FERG. Noise. You can see the stock breaking above and below them on a regular basis as it chops up and down in a sideways channel. I know that doesn’t sound good but it is. It gives us information about where the demand is currently and where the supply is as well. The buyers (demand) are swarming into the stock every time it gets down to $220. That was the bottom in January, March, May and July this year. The sellers (supply) have no qualms about unloading the stock every time it breaks $250. That was the top in February, April and last week. One day that will change and that’s what we want to watch on its next attempt. One day, the stock will break $250 and the sellers won’t show up. This is when you mash the pedal to the floor and load up. We’re not there yet. The earnings report this week gave us the best possible test of that $250 level. The company beat on revenue, beat on earnings, raised guidance — the stock ripped to $260. That is as good a catalyst as you are going to get. And the sellers still showed up. FERG is sitting at $245 as I write this, right back in the middle of the range where it has spent most of the last year. That rejection matters. It tells you $250 is a real level with real sellers who have real shares to move. But here’s the other thing it tells you: every time the stock gets repelled from $250, those sellers are a little closer to being done. Supply gets exhausted. At some point there are no more shares to sell at that price and the stock walks right through. We just don’t know when that day comes. The RSI is sitting at 53 — no urgency in either direction. The 50-day and 200-day are clustered right below the current price at $234 and $240, which at least gives us a zone to watch on the downside. A close back below $220 would tell you the range has broken in the wrong direction and you exit whatever you have. For now, however, we’re looking at a stock that wants higher with a dwindling pool of sellers. Technicians refer to this as a “set-up” and if they’re not actively involved at the moment, they are said to be “stalking” the ticker. Let’s all stalk this one together. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.Read More
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