Snap-On earned an upgrade to its Relative Strength (RS) Rating, from 77 to 81 Friday, jogging past a major milestone along the way. The hand tools maker, which is No. 1 in its industry group, has been a Steady Eddie stock over the years, mostly growing at a good clip through good times and bad.
Snap-On Stock Climbs Into High-Growth Group
The Kenosha, Wis.-based company, between Chicago and Milwaukee, has a diverse product line. In addition to making and selling hand tools and other shop equipment, it sells storage equipment and diagnostic software. And it sells to a broad market, including auto, aviation/aerospace, collision repair, construction and agriculture companies, among others.
The upgraded 81 Relative Strength Rating means that Snap-On stock topped 81% of all stocks for price performance over the last 52 weeks. It's notable because research shows that the best stocks typically have an RS Rating north of 80 in the early stages of their moves.
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Among its other key ratings, Snap-On stock carries an 86 Composite Rating, putting it in the top 14% of companies overall. IBD's Composite score combines five separate proprietary ratings into one. The best growth stocks often have a 90 or higher Composite. Its outstanding 91 EPS Rating reflects strong, steady profit growth.
It also has an outstanding A SMR Rating (sales + profit margins + return on equity) on an A-to-E scale, with A terrific and E dismal.
Like other stocks pummeled by the bear market last year, it has a weak D- Accumulation/Distribution Rating. That means mutual funds, ETFs and other funds are selling more shares than buying.
Shares Pivot From Bear, Then Get Whipsawed
Meanwhile, Snap-On stock bottomed last year earlier than the October bear market bottom for most stocks.
It dropped to a 190.08 low in mid-June 2022 after forming a cup base, and then turned up. It jumped 8% on an earnings beat in late April this year, but then took a 7.3% hit on July 20 on an earnings miss. Snap-On traded around 260 Friday afternoon.
Snap-On reported 15% earnings growth in its most recent report to a strong $4.89 per share. Sales rose a mild 5% to $1.19 billion. The company says on its website it plans to announce Q3 results the morning of Oct. 19.
Snap-On stock holds the No. 1 rank among its peers in the six-stock Building-Hand Tools industry group. Landscaping equipment maker Toro and tools maker Stanley Black & Decker are also in the top five of the group.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's unique RS Rating measures technical performance by using a 1 (worst) to 99 (best) score that indicates how a stock's price performance over the last 52 weeks matches up against the rest of the market.
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