Home products maker Clorox has at times been a market leader, an excellent stock watchlist candidate. The iconic cleaning products maker, founded in 1913, is currently the top-ranked company in the cleaning products group. However, Clorox stock will need more work to be an overall market leader again. One bullish sign is that its Relative Strength Rating just climbed to 82.
Clorox Stock Joins Elite Group
That means the maker of cleaning products, trash bags, water filtration systems and other products has outperformed 82% of all stocks over the past 52 weeks. It's an important distinction. The market's biggest winners tend to have an RS Rating over 80 as they begin their biggest climbs. Clorox stock just bounced into that elite group of stocks.
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Clorox has struggled this past year amid rising inflation. Still, Clorox stock holds the No. 1 rank among its peers in the Soap & Cleaning Preparation industry group, according to IBD research. Rival consumer products makers Church & Dwight and Ecolab are also among the top-ranked stocks in the small group.
Clorox stock has traded in a fairly narrow range since February. Most recently, it dropped to a 124.58 low on Oct. 10. From there it's risen about 20% to near 150, above its 50-day and 200-day lines. It was up fractionally Thursday afternoon. While the stock is not near an ideal entry right now, see if the stock watchlist candidate goes on to form and break out from a proper consolidation.
Look For Improved Fundamentals
So, what does it need to do to return to former glory, and to push Clorox stock higher? Simple. It needs to lift sales and profits. Clorox on Nov. 1 reported a 23% drop in earnings last quarter, to 93 cents per share. It posted a 4% year-over-year dip in revenue to $1.74 billion. Clorox said last month that it expects adjusted earnings of $3.85 to $4.22 for the current year. The Oakland, Calif.-based company projects a sales range of down 4% to up 2% for the year.
When looking for the best stocks to buy and watch, be sure to pay attention to relative price strength.
IBD's proprietary Relative Strength Rating tracks market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock's price performance over the trailing 52 weeks stacks up against all the other stocks in our database.
