Inflation rates are at multiyear highs and consumers are bargain-hunting. They find them at discount retail giant Dollar General. Its stock rose to near an all-time high on Wednesday. Also on Wednesday, the Relative Strength (RS) Rating for Dollar General stock climbed to a new percentile, rising from 76 to 81.
Decades of market research reveals that the best stocks tend to have an 80 or better RS Rating as they begin their biggest climbs. Dollar General has joined that top-performing group. On Feb. 24 the discount retailer's stock dropped to an intraday low 185.15 amid the early 2022 market correction. It's powered 27% higher since then. Dollar General stock traded at 234.45 Wednesday afternoon, up 2.2% for the day and closing on its 240.14 all-time high set on Jan. 7.
Big Money Buying Dollar General Stock
Among other key ratings, Dollar General stock has an 87 Composite Rating, of 99, putting it in the top 13% of all stocks overall. The Nashville, Tenn.-based company also has a 77 EPS Rating and an A- Accumulation/Distribution Rating, on an A+ to E scale. The A- rating shows that institutional investors like mutual funds and ETFs are heavy buyers.
In terms of fundamentals, the company posted a 2% year-over-year decline to $2.57 earnings per share last quarter. That's one area where the company could use improvement. Sales last quarter rose 3% to $8.65 billion.
See How IBD Helps You Make More Money In Stocks
Dollar General rose above a 232.78 cup-with-handle buy point Wednesday although volume was less than the 40% higher than normal CAN SLIM investors like to see.
Dollar General holds the No. 2 rank among its peers in the Retail-Discount & Variety industry group. BJ's Wholesale Club and Dollar Tree are also among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, keep a close on eye on relative price strength.
IBD's unique rating tracks price movement 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.
