Tech stocks are getting their groove back. Among them is broadband communications networking company Calix. On Wednesday, Calix stock passed a crucial milestone, as its Relative Strength Rating shot up to 82. Calix stock is in the Computer Networking group, which ranks a decent No. 80 on IBD's list of 197 industry groups. That's much improved from a weak 126 rank four weeks ago.
The 82 RS Rating means that Calix stock has outperformed 82% of all stocks in terms of price performance over the past year. Market research shows that the best stocks to buy and watch tend to have an RS Rating above 80 in the early stages of their moves. Calix is in that elite group now.
Calix Stock Among Top 6% Overall
Among its other significant ratings Calix stock can boast it has a 94 Composite Rating, out of 99. That puts it in the top 6% of stocks for a composite of five other fundamental and technical metrics. The San Jose, Calif.-based company also has a strong 92 Earnings Per Share Rating and a B SMR Rating (sales+profit margins+return on equity). Its B Accumulation/Distribution Rating on an A+ to E scale shows that institutions like mutual funds are buying more shares than selling.
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Looking at Calix stock performance the last few weeks, it's rebounded from a March 13 close at 46.97 to close at 55.88 Wednesday, up 0.5% on a mixed day for the market. It rose above its 50-day line last Thursday and trades just below its 200-day. While the stock is not near an ideal buy point right now, see if it goes on to form and break out from a proper base.
Three Quarters Of Improved Earnings Performance
Taking a look at revenue and profit performance, the company has posted three quarters of rising earnings growth. Sales growth has also moved higher during the same period. Last quarter it posted a 31% rise in EPS to 34 cents a share, on a 39% surge in revenue to $244.5 million. It should be noted that the report was a reversal of the previous three quarters when the company reported a 44% year-over-year drop in earnings, then a 42% and 3% drop. During that time sales steadily increased though, rising 14%, 20%, then 37%. Calix is expected to report its next quarterly numbers on or around April 19.
The company holds the No. 2 rank among its peers in the Computer-Networking industry group. Arista Networks is No. 1 in the group and Digi International is No. 3. Networking majors Extreme Networks and Juniper Networks round out the top 5 in the group.
IBD's unique Relative Strength Rating measures price performance with a 1 (worst) to 99 (best) score. The rating shows how a stock's price performance over the trailing 52 weeks stacks up against all the other stocks in our database.
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