You've probably seen the name Aramark on a service provider's uniform or a piece of equipment. It's a leader in the commercial services and outsourcing industry. On Wednesday the Relative Strength Rating for Aramark stock cleared a key benchmark, shooting to an 80 rating, up 12 points from 68 the day before.
On Tuesday, the company reported that fiscal third quarter earnings grew 733% to 25 cents per share. Revenue climbed 38% year over year to $4.13 billion.
Aramark's new, higher RS Rating makes it a good candidate to add to a watchlist. Market research shows that the market's biggest winners often have an RS Rating of at least 80 in the early stages of their moves.
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Aramark Stock Has Near Perfect Composite Rating
Among the other key ratings for Aramark stock, its Composite Rating is a top-notch 97 of a best-possible 99. It has a mild 77 EPS Rating but that reflects poor profit growth in the early part of the pandemic as businesses shut down. The last four quarters its EPS growth has risen every quarter, rising from 160% a year ago to 733% growth last quarter. Importantly, it has an A+ Accumulation/Distribution Rating on an A+ to E scale with A+ tops. That means big money investors like mutual funds and ETFs are loading up on Aramark stock.
In May, Aramark announced that it plans to spin off its vaunted uniforms business as a separate company. It says the move will be tax-free to Aramark and its stockholders.
Philadelphia-based Aramark provides a wide range of services and products including food services and facilities management and uniforms for hospital, restaurant, business and leisure companies, among others. The services provider operates in North America and 20 countries around the globe.
Nearing Buy Point
Aramark stock is building a cup-without-handle base with a 40.05 entry. See if it can clear the breakout price in heavy trade. It's closed higher 12 of the last 13 trading sessions as it rapidly builds the right side of the cup pattern. In Wednesday afternoon trading Aramark was up more than 1% to around 36.50.
Aramark holds the No. 3 rank among its peers in the Commercial Services-Outsourcing industry group. SP Plus and Automatic Data Processing are also among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's unique RS Rating identifies technical performance by showing how a stock's price action over the last 52 weeks compares to that of other stocks on the major indexes.
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