When choosing among stocks in the same sector, investors often compare fundamentals like price-to-earnings ratios (P/E) or earnings per share (EPS), balance sheets and other metrics.
But it’s also important for investors to compare the relative strength of a stock versus its peers in that sector. In other words, investors also want to consider the stocks that are recently outperforming other similar stocks, because these are the stocks that institutions are buying and will usually continue to perform well.
