Real GDP rose to 2% in 2022, according S&P Global Market Intelligence, surprisingly strong despite the bear market. If the Fed is satisfied the inflation rate is falling this year, and shrinks rate increases, that could unleash even stronger growth. Among the companies that stand to benefit is Canadian Pacific Railway. On Monday Canadian Pacific stock earned a bump higher for its Relative Strength (RS) Rating, to 82, up from 79.
The upwardly revised 82 RS Rating shows that Canadian Pacific stock has outperformed 82% of all stocks, regardless of industry, over the past year, putting it among the best stocks to buy and watch.
Market research over decades demonstrates that stocks that go on to make the biggest gains typically have an RS Rating north of 80 in the early stages of their moves.
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Canadian Pacific Stock's Other Ratings Mixed
Among its other key ratings, Canadian Pacific stock has a decent 79 Composite Rating, out of 99. Its Earnings Per Share Rating is solid at 82. It also has a solid B SMR Rating, on an A to E scale with A tops. The SMR Rating is an amalgam of its sales+profit margins+return on equity. It's not all sunshine and roses though. CP has a D- Accumulation/Distribution Rating. That indicates that big investors like mutual funds and ETFs will need more convincing before they dive in.
Canadian Pacific stock is trying to complete a flat base with an 83.06 entry. See if it can clear the breakout price in heavy trade. It hit a 2022 bottom at 65.17 in mid-October and started rising. It's up about 19% since then and closed Monday at 77.71, up fractionally despite weak closes for the indexes.
Two Quarters Of Rising Sales, Profits
In terms of fundamental health, Canadian Pacific Railway has posted two quarters of rising earnings growth. Sales gains have also increased during the same period. In its latest quarter, the railroad's EPS rose 15% to $1.01 on a 19% increase in revenue to $2.31 billion. The company is expected to report its next quarterly numbers on or around Jan. 25.
Canadian Pacific Railway holds the No. 5 rank among its peers in the Transportation-Rail industry group. CSX and Canadian Natl Railway are also among the group's highest-rated stocks.
IBD's proprietary Relative Strength Rating identifies market leadership with a 1 (worst) to 99 (best) score. The grade shows how a stock's price movement over the trailing 52 weeks compares to all the other stocks in our database.
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