Chipotle Mexican Grill rose to an all-time high in late July, then cooled off amid market consolidation. Shares of the popular fast casual Mexican restaurant chain are on the rise again. On Thursday, Chipotle stock saw its Relative Strength Rating improve from 67 to 72.
The upgraded 72 rating shows that Chipotle stock is outperforming 72% of all stocks. It's a good but not yet great rating, still 8 points below the 80 or higher RS Rating that CAN SLIM investors like to see. However, its other ratings show renewed strength.
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Chipotle Stock Other Ratings Excellent
Chipotle stock also owns a best-possible 99 Earnings Per Share Rating, and a strong 87 Composite Rating. Its B- Accumulation/Distribution Rating shows that institutional investors such as mutual funds and ETFs are buying more shares than selling. Another bullish data point: The number of funds owning Chipotle stock rose from 2,058 in the March-ended quarter to 2,200 in June, the highest number in at least a year.
Chipotle stock rose to a fresh all-time intraday high 2,175.01 on July 19. It dropped to 1,872.64 on July 27 and then turned up before retreating again this month amid the current market pullback. Thursday afternoon, Newport Beach, Calif.-based Chipotle traded around 1,864. It rose in three of the prior four trading sessions. However, it doesn't currently offer a buy point. Watch for a new base such as a three-weeks tight or a cup pattern to form.
Earnings Growth Rate Ranges Up To 84%
Chipotle Mexican Grill reported 36% earnings growth in the latest quarter, to $12.65 per share. The prior three periods its EPS grew 35%, 49% and then 84%. Sales grew 14% in its most recent quarter, to $2.52 billion, continuing a string of double-digit sales growth.
Chipotle Mexican Grill earns the No. 2 rank among its peers in the 54-company Retail-Restaurants industry group. An Uruguay-based restaurant chain, Arco Dorados, is No. 1 in the group. Chipotle rival Chuy's, an Austin, Texas-based Mexican and Tex-Mex food chain, is No. 3 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 proprietary Relative Strength Rating tracks market leadership with a 1 (worst) to 99 (best) score. The grade shows how a stock's price behavior over the trailing 52 weeks stacks up against all the other stocks in our database.
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