Good news! Dr. Copper says the economy may be on the upswing. On Tuesday, the Relative Strength Rating for highly rated Southern Copper stock jumped to 81, passing an important milestone, and up from 75 on Monday.
Copper metal is ubiquitous in today's electronics, autos, homes and many other things. Because copper is used in so many products, market watchers call the orange metal Dr. Copper. When copper prices and stocks are improving that's often a good sign for the overall economy too.
Southern Copper Stock Rises Into Elite Group
The upgraded 81 RS Rating means Southern Copper stock topped 81% of all stocks for price performance over the past year. Stocks that go on to make the biggest gains tend to have an RS Rating above 80 as they begin their biggest price moves.
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Southern Copper is a subsidiary of Mexican copper producer Minera Mexico, headquartered in Mexico City. Southern Copper's earnings jumped 25% to 71 cents per share last quarter, up from a meager 3% rise the prior quarter and its best showing in at least a year.
The shift to stronger earnings is welcome but it might be best to wait for further confirmation that the stock is in a upturn before buying in. Also, the market is in a correction, making it riskier to open new positions.
Sales Growth Still Anemic
Last quarter Southern Copper reported $2.3 billion revenue, flat with the same quarter a year earlier. The quarter before that its sales edged up just 1% to $2.794 billion. The company is expected to report its latest performance numbers on or around Oct. 25. Look for stronger sales growth.
Among its other key ratings Southern Copper has an outstanding 91 Earnings Per Share Rating out of 99. Its Composite Rating, a combination of IBD's five other key ratings, is also a strong 91. Its SMR Rating (sales + profit margins + return on equity) is a powerful A on an A-to-E scale with A tops.
Finally and perhaps most importantly it has a B- Accumulation/Distribution Rating, indicating that mutual funds, ETFs and other funds are fairly heavy buyers of its stock. Institutional investors account for about 70% of all trading so it's a good sign when they are buying.
Southern Copper stock bottomed in the 2022 bear market a month or two earlier than many other companies, falling to a 42.42 low on Sept. 26 last year. It's risen about 40% in the intervening 13 months, to above 71 Tuesday afternoon, up about 1.8% for the day.
Southern Copper stock holds the No. 2 rank among its peers in the Mining-Metal Ores industry group. Canada's Cameco and New York-based iron metal trust Mesabi Trust are also among the group's highest-rated stocks.
As you try to find the best stocks to buy and watch, be sure to pay attention to relative price strength.
IBD's unique Relative Strength Rating measures share price action with a 1 (worst) to 99 (best) score. The rating shows how a stock's price performance over the last 52 weeks stacks up against all the other stocks in our database.
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