In a bear market, investors need to understand how to sell stocks to protect their portfolios. They also need to study when to buy stocks in preparation for the next bull market. Educational services provider Stride provides lessons on both.
Currently earning the highest-possible 99 Composite Rating, Stride has landed a spot on the monthly list of new buys by the best mutual funds in each of the last three reports. And while The IBD Methodology recommends holding off on new buys in this environment, the stock remains worthy of study as a result of two more telltale indicators.
Stride Shares Top Billing In Strong Group
Based in Reston, Va., Stride provides educational services across K-12 education, career learning, professional skills training, and talent development. The company has operations in all 50 states and more than 100 countries.
Stride shares top billing in the Consumer Services-Education group with peer Adtalem Global Education. The group ranks No. 6 among the 197 industries Investor's Business Daily tracks. It also holds the top ranking on the IBD 50 list of top stocks and earns a spot on the Stock Spotlight screen.
In addition to making multiple appearances on the monthly screen of new buys by top funds, also sports a 1.3 up/down volume ratio. Twenty-one funds with an A+ or A rating from IBD own shares of Stride.
In the fourth quarter of last year, the company generated $587.2 million in sales, a 16% year-over-year gain. Earnings rose 32% to $2.03 per share.
The company is set to report first-quarter earnings on April 29. Analysts expect 13% sales growth to $591.1 million and a 26% rise in earnings to $2.01 per share.
Estimates for the full year call for earnings growth of 41% to $6.60 a share.
Two Telltale Clues Bode Well For Stride
As investors build a list of stocks to watch while waiting for a market turnaround, Stride continues to command attention.
One clue drawing interest from Wall Street is Stride's spiking relative strength line. Notching a new 52-week high, its RS line earns a blue dot in MarketSurge, a clear sign of market leadership. Industry peer Adtalem shares that honor. Their rising relative strength lines show both stocks are outpacing the S&P 500.
A recent reset of its base count provides a second promising indicator for Stride. A reset happens when a stock undercuts the low within its prior consolidation. Stride did that in October, making its current chart pattern a first-stage base.
First- and second-stage bases have a higher likelihood of success than later-stage bases, which entail more risk since they only form after a stock has already made a significant climb.
But Stride's new base remains a work in progress. On Tuesday, the stock tried but failed to retake its 50-day moving average. But in a sign of resilience, Stride bounced back above its 21-day exponential moving average and 50-day line on as the Nasdaq bolted higher on Wednesday on the latest tariff news.
So as investors wait for an improvement in the general market indexes, also look for Stride to complete its current consolidation and ride any positive shift in market direction.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
