It's not often that a stock sees its Relative Strength (RS) Rating soar 22 points in a day. ABM Industries achieved just that feat after it reported earnings and sales on Wednesday that topped Wall Street estimates. On Thursday, the RS Rating for ABM stock shot up to 89 from 67 the day before, crossing above a key benchmark along the way.
The 89 Relative Strength Rating means that ABM stock tops all but 11% of all stocks for price performance over the past year. It's a notable achievement because top-performing stocks typically have an RS Rating north of 80 in the early stages of their moves.
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ABM Stock Bolstered By $150 Mil Buyback
New York City-based ABM Industries provides janitorial, security and engineering services for commercial, industrial and retail facilities. On Wednesday ABM reported a 13% hike in fiscal fourth quarter earnings to $1.01 per share, on a 4% rise in revenue to $2.09 billion.
The company also gave 2024 guidance that topped many analysts' estimates, and approved a $150 million expansion of its existing share repurchase plan.
"For full year fiscal 2023, ABM delivered solid performance in what was an unusually difficult operating environment, marked by labor shortages, wage inflation, rising interest rates and softness in commercial real estate," said Scott Salmirs, ABM's president and CEO, in a news release. He added that the "results highlight the advantages of our end market diversification."
ABM stock shot up 18% Wednesday after the earnings report. On Thursday, the stock gave back a big chunk of that gain, dipping 10.4% in afternoon trading, although it retained some of the massive gain from Wednesday.
Other Ratings Also Outstanding
Among its other key ratings, ABM stock has a strong 91 Composite Rating out of 99. It has an 87 Earnings Per Share Rating and a B+ Accumulation/Distribution Rating. The B+ rating shows that mutual funds, insurance funds and the like are buying more ABM shares than selling.
ABM stock is now considered extended and out of buy range after clearing a 40.78 buy point in a first-stage consolidation. See if the watchlist candidate forms a fresh pattern or follow-on buying opportunity like a three-weeks-tight pattern or a pullback to the 50-day or 10-week line.
Group As A Whole A Standout
ABM stock holds the No. 7 rank among its peers in the Building-Maintenance & Services industry group. Transmission and electric utility services company MYR Group is a leader in the group. And mechanical and electrical construction services provider EMCOR Group is also among the group's highest-rated stocks.
The group as a whole has an outstanding group Relative Strength Rating of A. Additionally, it's a strong No. 32 on IBD's list of 197 industry groups.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's Relative Strength Rating identifies market leadership by showing how a stock's price movement over the last 52 weeks measures up against that of the other stocks in our database.
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