On Tuesday the Relative Strength (RS) Rating for Builders FirstSource climbed to a rarefied 91, up from 87 the day before. The 91 RS Rating means that the construction supplies giant's stock price has outperformed 91% of all stocks over the past year. The caveat, of course, is that in today's market correction many stocks are taking a hit, so Builders FirstSource stock is among the best of breed in a really weak market.
Still, market research shows that the best stocks typically have an RS Rating north of 80 as they begin their largest price moves. Its outstanding numbers make Builders FirstSource stock a good watchlist candidate.
Builders FirstSource Stock Rose As It Posted 300%-Plus Profits
It'd be hard to beat the home building products supplier's profit numbers. Builders FirstSource reported 116% year-over-year earnings growth last quarter, to $2.78 per share. The prior three quarters its EPS rose 358%, 289% and 308%. Sales rose 83% in its most recent quarter, to $4.63 billion. The prior three periods it reported triple-digit sales growth.
Builders says on its website that it plans to announce first quarter earnings results on the morning of Tuesday, May 10. Its stock soared 600% from a Covid crash intraday low 9 in late March 2020 to about 62 Tuesday. Shares slid 5% Tuesday afternoon amid the market correction.
Among other key ratings, Dallas-based Builders FirstSource boasts a perfect 99 EPS Rating, reflecting its superb profit growth amid a rising housing market. And Builders FirstSource stock carries a 92 Composite Rating.
The IBD Composite Rating helps investors easily measure the quality of a stock's fundamental and technical metrics. The best growth stocks have a Composite Rating of 90 or better.
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Watch For Fresh Pattern, Breakout
Builders FirstSource stock is now considered extended and out of buy range after clearing a 52.82 buy point in a second-stage cup with handle. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week line.
Builders FirstSource stock earns the No. 3 rank among its peers in the Building-Construction Products/Miscellaneous industry group. Core & Main and Tecnoglass are among the top 5 highly rated stocks within the group.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength. This unique Relative Strength Rating tracks technical performance by showing how a stock's price movement over the last 52 weeks measures up against that of the other stocks in our database.
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