Burlington Stores, the 51-years old discount chain known for its high quality coats and other garments, may have turned a corner. It reversed from several quarters of declining earnings growth to post a 17% gain last quarter. Additionally, Burlington stock got an upgrade Thursday to its Relative Strength (RS) Rating, rising from 77 to 83, a bullish indicator.
The 83 RS Rating shows that Burlington has outperformed 83% of all stocks over the past 12 months. Market research shows that the best stocks tend to have an RS Rating over 80 in the early stages of their moves. Burlington is now in that elite group of the best stocks to buy and watch. However, the rating upgrade comes with caveats.
Burlington Stock Ratings Need Work
For one thing, its other ratings will need to improve before Burlington stock can move from stock watchlist candidate to buy candidate. It has a weak 35 Earnings Per Share Rating, largely because of the earnings shrinkage leading up to the most recent quarter. Its 68 Composite Rating is better than its EPS Rating but needs improvement too.
On the upside, big money investors noticed the improved fundamentals last quarter. Burlington stock has a C Accumulation/Distribution Rating, showing that about as many funds are buying its shares as selling. Additionally, the number of top-rated funds holding Burlington shares rose from 1,169 in September to 1,207 in March.
Looking For The Best Stocks To Buy And Watch? Start Here
Burlington stock dropped to a 106.47 intraday low on Sept. 30. It's shot up about 82% since then to near 194 Thursday afternoon, up 2% for the day.
Burlington Profits Shrank Until Recently
Burlington has been profitable every quarter over the past year, but its profits shrank until the most recent quarter. Earnings grew 17% last quarter, to $2.96 per share, reversing from a 68% dip the prior quarter to 43 cents per share. Revenue rose 5% to $2.74 billion last quarter, vs. an 11% slide the prior period. Burlington is expected to report its latest results on or around May 25.
Burlington stock holds the No. 7 rank among its peers in the Retail-Apparel/Shoes/Accessories industry group. TJX Cos. and Ross Stores are among the group's highest-rated stocks.
IBD's unique RS Rating measures 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.
