Albertsons, one of the biggest supermarket chains in the country with a roughly $70 billion annual run rate, formed a nice cup-shape base from December to March. Then it succumbed to the bear market and the base failed. Its stock is on the rise again and its timing could be right this time as the market appears to be emerging from its severe downturn. On Thursday, the Relative Strength (RS) Rating for Albertsons stock earned an upgrade to 71, from 68 the day before.
Albertsons Stock Set Up For Win On Second Try?
The new 71 RS Rating means that Albertsons stock has outperformed 71% of all stocks over the past year in terms of stock price performance. It moves the Boise, Idaho-based company closer to the pivotal 80 RS Rating. Market research shows that the best-performing stocks often have an RS Rating north of 80 in the early stages of their moves. Meanwhile, Albertsons other ratings are even higher, pointing to stronger growth potential than the RS number indicates.
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Among other key ratings, the supermarket chain, which operates some 2,276 stores under 20 banners including its namesake, has a powerful 95 EPS Rating, of a best-possible 99. That spotlights strong recent quarters and long-term profit growth. Albertsons stock has an 89 Composite Rating, another really good rating. It puts the company in the top 11% on a group of key metrics.
The Composite Rating combines five separate proprietary IBD ratings, based on key fundamental and technical criteria, into one easy-to-use score. The best growth stocks have a Composite Rating of 90 or better.
Albertsons stock dipped to an intraday low 26.51 on May 19 after its cup pattern failed to yield a breakout amid the bear market. It's risen about 11% in the last three weeks and traded above 29 Thursday afternoon. It's not currently near a potential buying area. See if the stock goes on to form a sound pattern that could spark a new run.
Profits, Sales Growth Rose Last 3 Quarters
In terms of fundamentals, Albertsons has posted rising EPS growth over the last three quarters. Sales growth has also moved higher during the same period. In its most recent quarter it reported a 25% increase in EPS to 75 cents on a 10% year-over-year rise in revenue to $17.4 billion.
The company holds the No. 6 rank among its peers in the Retail-Super/Mini Markets industry group. Murphy USA, Ingles Markets and Caseys General Stores are also among the group's highest-rated stocks. Kroger, the nation's largest supermarket company and parent of Ralph's and other store brands, is No. 5 in the group.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's unique Relative Strength Rating measures share price movement with a 1 (worst) to 99 (best) score. The rating shows how a stock's price performance over the last 52 weeks holds up against all the other stocks in our database.
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