With so much news during earnings season, it’s hard to keep track of outperforming stocks. But one way to find the best stocks is to look at their IBD Composite Rating.
The Composite Rating compiles scores on key fundamental and technical metrics: earnings and sales growth, profit margins, return on equity and relative price performance.
Rio Tinto has a perfect 99 Composite, Generac has a 98 rating and Goldman Sachs has a 97. Five9 has an 83 and the Cheesecake Factory has a weaker 70 rating.
Investors generally should focus on stocks with a Composite Rating of 90 or higher. But the rating is only a single metric and investors should take others into consideration when deciding to buy or sell stocks.
Five Stocks Near Buy Points
GS Stock Tops Apple, Home Depot
The Dow Jones banking giant is the top-ranked stock in IBD’s Banks-Money Center Group and has a 92 EPS Rating.
GS stock is up more than 30% so far this year, while fellow Dow Jones stalwarts like Apple (AAPL) and Disney (DIS) are largely flat. Even Home Depot (HD), which is a top beneficiary of the housing boom with a gain of about 20%, trails Goldman.
Goldman shares slipped 1.3% to 348.45 in Friday’s stock market trading, while forming a flat base with a 365.95 entry point, according to MarketSmith chart analysis. The stock had some early entry opportunities, but the shares have moved upward, past those earlier buy points.
GS stock rallied April 14 after reporting blowout Q1 earnings, led by strong trading and investment banking performance.
On Thursday, Generac reported first-quarter earnings of $2.38 per share, beating Wall Street estimates, as sales jumped 70% to $807 million, also topping estimates. The generator maker raised its full-year sales growth outlook to 40%-45% from a prior outlook of 25%-30%.
With a boom in home improvement projects and the electric grid failure in Texas, homeowners are eager to install backup generators.
Shares fell 3.9% to 323.95 Friday. Generac stock is consolidating in a cup-with-handle base with a 342.38 buy point. Shares have also found support around the key 50-day line.
Generac is the top-ranked stock in IBD’s Electrical-Power/Equipment group. It has a nearly perfect 97 EPS Rating.
Cheesecake Factory Stock
On Thursday, the casual dining chain reported a 53% jump in Q1 EPS to 20 cents, beating Wall Street estimates by 5 cents. Revenue rose 2% to $627.4 million, also beating as Covid-19 restrictions have begun easing and more vaccinated customers are comfortable eating inside restaurants.
Shares were off 1% Friday at 62.59. Cheesecake Factory stock is forming a flat base with a 63.30 buy point.
However, the stock has some technical weaknesses. It only has a 34 out of possible 99 EPS Rating, along with its weak 70 Composite Rating.
Rio Tinto Stock
Rio Tinto mines iron ore, copper and aluminum. Demand for electric vehicles and the U.S.’ renewed investment in infrastructure projects is bullish for the British-Australian company.
Shares fell 2.8% to 85.06 Friday. Rio Tinto stock is consolidating in a cup base with an 88.83 buy point after climbing ahead of its 50-day line. On a weekly chart, Rio stock has a tiny handle with an 88.39 buy point. It’ll have a handle on a daily chart after Monday.
Rio stock has a 94 EPS Rating and is ranked fourth in IBD’s Mining-Metal Ores group.
Five9 makes cloud-based customer-contact software that assists companies with services, sales and marketing.
On Thursday, the company reported Q1 results that beat analyst estimates and gave full-year guidance ahead of Wall Street views.
FIVN sock jumped 7.9% to 187.97 Friday. Five9 stock has a 201.85 buy point as it consolidates in a cup base. Aggressive investors could use 181.98 as an early entry off of what is just too low to be considered a proper handle.
The stock has a 96 EPS Rating and is ranked sixth in the Computer Software-Enterprise group.
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