One sector that’s been a big winner during the pandemic is shipping, as stay-at-home families have ordered in restaurant meals, groceries, cleaning supplies and other goods. Two companies dominate in terms of sales, FedEx and UPS, which is biggest by revenue. On Thursday, the Relative Strength (RS) Rating for top-rated FedEx (FDX) climbed to 74, up from 70 the prior day.
The 74 Relative Strength Rating means FedEx has outperformed 74% of all stocks over the past year. The market’s biggest winners typically have an 80 or higher RS Rating as they begin their biggest runs. See if FedEx can continue to rebound and hit that benchmark.
FedEx Still Improving
Although its stock performance is still improving, it’s showing more strength in other areas. For example, it’s EPS Rating of 95, out of a best-possible 99, highlights strong profit growth in recent quarters and years.
Additionally, FedEx has an 88 Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock’s fundamental and technical metrics. It’s just slightly out of the leader’s circle. The best growth stocks have a CR of 90 or better.
The jury is still out on other technicals. Mooresville, N.C.-based FedEx has a C Accumulation/Distribution Rating, on an A+ to E scale. That indicates about as many institutional investors are buying as selling.
And although FedEx’s relative strength line, which compares a stock’s performance vs. the S&P 500, is rising, it’s not quite at a new high, which CAN SLIM investors like to see in a stock, because it indicates it might be ready for a breakout.
In terms of top and bottom line numbers, FedEx has posted four quarters of double-digit, year-over-year earnings growth. Sales growth has also risen over the same time frame.
In its most recent quarter, the parcel and less-than-truckload delivery service reported a 41% jump in earnings per share to $1.33. Revenue grew 27% to $20.33 billion. On Thursday, FedEx shares jumped 2.2% to 274.18.
FedEx holds the No. 1 rank among its peers in the Transportation-Air Freight industry group, based on the Composite Rating. Atlas Air Worldwide (AAWW) is No. 2 and giant UPS (UPS), which reported $24.5 billion revenue last quarter, is No. 3 ranked.
FedEx is working on a consolidation with a 305.76 buy point. It’s also been forming a cup pattern since December. See if it can clear the breakout price in heavy volume.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
This exclusive rating from Investor’s Business Daily identifies share price action with a 1 (worst) to 99 (best) score. The rating shows how a stock’s price behavior over the last 52 weeks stacks up against all the other stocks in our database.
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