Domino's Pizza nudged up against a key benchmark on Monday. The Relative Strength (RS) Rating for Domino's climbed 11 points, from 68 last week to 79, showing unusual stock price strength. Additionally, Domino's profit growth is trending upward, and it saw earnings pop 50% last quarter. Domino's stock shot up 4.5% Monday.
The upgraded 79 Relative Strength Rating means Domino's stock beat 79% of all stocks for price appreciation over the past year. Market research shows that stocks that go on to make the biggest gains typically have an RS Rating north of 80 as they begin their largest climbs. See if Domino's Pizza can continue to show renewed price strength and hit that benchmark.
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Domino's Stock Popular With Big Funds
Among its other ratings, Domino's stock has an OK 75 Composite Rating. However it boasts a 93 Earnings Per Share Rating, reflecting strong recent earnings growth. Additionally, it has a B Accumulation/Distribution Rating on an A+ to E scale with A+ tops. The B rating shows that ETFs, mutual funds and the like are buying more of its shares than selling.
Watchlist candidate Domino's stock boasts strong stock price appreciation amid rising earnings growth. However, its revenue growth has been lackluster so it's a "two-out-of-three ain't bad" situation.
Last quarter, Ann Arbor, Mich.-based Domino's reported 50% higher earnings to $4.18 per share on a 4% dip in revenue on a year-over-year basis, to $1.03 billion. The prior three periods Domino's revenue rose 4%, 1% then fell 4%. So it posted back-to-back 4% shrinkages, not a major concern but one to keep an eye on. Look for sales to grow at a faster pace this quarter.
Shares Up 35% Since May
Domino's stock is working on a consolidation with a 409.95 buy point. See if the stock can clear the breakout price in volume at least 40% higher than normal. On May 31 the pizza giant closed at 285.84. On Monday it closed at 387.07, up nearly 5% for the day and up 35% since May 31.
Domino's stock earns the No. 17 rank among its peers in the Retail-Restaurants industry group. Argentine McDonald's franchise Arcos Dorados Holdings and Wingstop are among the group's highest-rated stocks.
When you're researching the best stocks to buy and watch, keep a close on eye on relative price strength.
IBD's proprietary RS Rating tracks market leadership by showing how a stock's price movement over the last 52 weeks compares to that of the other stocks in our database.
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