Perrigo, a leading generic-drug and nutritional products maker, is rebounding. One reason is that it increased production of its Bobbie-partnered baby formula by 40% in Q1 on a year-over-year basis. It continues to ramp up production of the scarce product. On Tuesday, Perrigo stock's Relative Strength (RS) Rating shot up to an excellent 91, up from 85 the day before.
Decades of market research shows that the best stocks typically have an RS Rating north of 80 as they launch their biggest price moves.
In addition to making baby formula for partner Bobbie, Ireland-based Perrigo makes and sells over the counter and generic drugs, as well as diagnostic and nutritional products. ACO Pureglow skin cream, Yourbrand nicotine lozenges and Yourbrand Acid Reducer are among its products. Perrigo stock ranks a strong No. 2 among 19 stocks in its industry group.
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Perrigo Stock A Favorite Of Big Money Investors
Perrigo seems to be a riddle wrapped in mystery. Institutional investors like mutual funds and ETFs can't seem to get enough of it. It has an A Accumulation/Distribution Rating. The A/D rating, on an A+ to E scale with A+ the best, measures institutional buying of a stock. An A rating indicates heavy buying of its shares.
At the same time, however, Perrigo has reported slim earnings growth in recent quarters although sales growth has continued to rise at a modest pace. This has led to a middling 47 EPS Rating but a fairly strong 82 Composite Rating.
The IBD Composite Rating helps investors easily measure the quality of a stock's fundamental and technical metrics. The best growth stocks have a Composite Rating of 90 or better.
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Perrigo stock has risen from a 31.32 low on May 10 to 41.82 at the close Tuesday, a 34% climb. In the process it's risen above both its 200-day average and its 50-day line, though it's still well below its all-time high. The drugmaker is trying to complete a cup-without-handle base with a 51 buy point. See if the stock can clear the breakout price in volume at least 40% above average.
Perrigo Profits Not Consistent
Perrigo reported 33 cents per share earnings in the most recent quarter, down 34% from a year ago. The prior quarter though its EPS rose 28% year over year. Revenue last quarter grew 6% to $1.07 billion. The next quarterly numbers are expected on or around Aug. 11.
The company holds the No. 2 rank among its peers in the Medical-Generic Drugs industry group. Eagle Pharmaceuticals is the top-ranked stock in the group.
When you're researching the best stocks to buy and watch, keep a close on eye on relative price strength. IBD's unique Relative Strength Rating identifies price action with a 1 (worst) to 99 (best) score. The score shows how a stock's price behavior over the trailing 52 weeks compares to all the other stocks in our database.
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