Marten Transport's stock is starting to gain momentum as this member of the IBD 50 list of growth stocks works its way though a consolidation and nears a buy point.
The Mondovi, Wis.-based transporter of temperature-sensitive food and consumer goods has an IBD Composite Rating of 97, close to the best-possible 99.
Marten Transport, which started in 1946 with a single milk truck in rural Wisconsin, now has 3,500 refrigerated and other trucks. With more than 4,000 employees, the company delivers to all corners of the nation and to Canada.
The company ranks No. 1 in its IBD trucking industry group, according to Stock Checkup, which is geared to identify growth stocks ready to buy. The group itself is no showroom for growth stocks, though, as it ranks just No. 134 out of IBD's 197 industry groups.
Marten's high Earnings Per Share Rating of 96 is reflected in its average EPS growth of 31.1% the past three quarters as well as in its 17% average growth over the past three years. Q1 earnings beat estimates by 27%. Sales growth accelerated to 29% in Q1, outpacing the average 7% in the past three years.
Wall Street analysts see EPS rising 23% in the current quarter and 27% for the full year, according to MarketSmith.
Growth Stock's Market Action
Marten's stock is 12% below the 20.04 buy point of a consolidation that started on May 4. That's when MRTN stock hit a peak of 19.94. Now in the 13th week of the consolidation, the growth stock had a couple of blowouts before getting back on track.
After hitting its peak, the stock sank 20% in four weeks to 15.76. In that swoon, it fell under both its 50-moving average and 200-day moving average.
Over the next three weeks, it managed a 20% rally after reporting a 50% gain in Q1 earnings. But after reaching 18.92 on May 4, the stock again fell victim to profit-taking. In the sell-off, the stock downshifted again below its 50-day and 200-day lines.
That dip proved short-lived as the stock in a matter of days reversed higher at a level above the low of the consolidation.
Now Marten has regained both its 50-day and 200-day lines and sports an Accumulation/Distribution Rating of B. That indicates that there are more investors buying the stock than selling.
Another big positive is that Marten has earned a Relative Strength Line Blue Dot. This feature, found in MarketSmith charts, is given to stocks whose relative strength lines are at new highs just as or just before the stock's price reaches a buy point. Such action indicates superior power relative to other stocks in the market.
Time To Buy Marten?
While Marten Transport deserves a spot on investors' watchlists of growth stocks, remember that the stock market is in a correction and this is not an ideal time to be buying stocks.
Keep an eye on The Big Picture column to find out when the market enters a new uptrend, which will keep you on top of stock market news and tell you when the time is right to start buying stocks on your watchlists.
