Aramark reported fiscal Q2 earnings Tuesday morning. The company reported a 194% profit surge and it's nearing a buy point. Also on Tuesday, the Relative Strength Rating for Aramark stock climbed to 75, up from 69 the day before.
The upgraded 75 RS Rating shows that Aramark stock outperformed three-fourths of all stocks in IBD's database over the past year. Sales growth for the hospitality industry giant declined to 7% from 13% a year earlier and Aramark stock dipped Tuesday afternoon.
Aramark Stock Nearing Benchmark Rating
The Philadelphia-based company is nearing the 80 RS Rating that CAN SLIM investors like to see. Market research shows that stocks that go on to make the biggest gains tend to have an 80 or higher RS Rating in the early stages of their moves. See if Aramark can continue to show renewed price strength and hit that benchmark.
When To Sell Stocks To Lock In Profits And Minimize Losses
Look for the bare necessities and they will come to you, a popular Disney movie song says. That philosophy is working for Aramark, which provides food, facilities, uniforms and other necessities to various industries.
Aramark stock is one of those that came roaring out of the Covid market crash. It dropped to a 6.97 low in late March 2020. In the last 50 months it's soared 340% to around 30.60 Tuesday afternoon.
It's working on a flat base with a 33.04 buy point. See if the stock can clear the breakout price in volume at least 40% higher than normal.
Earnings Growth Rate Rising
Its earnings growth rate has risen the last three quarters from 36% to 173% and then 190% last quarter, to 29 cents per share. Sales grew 7% last quarter to $4.2 billion. The prior three periods it posted sales growth of 15%, 12% and 13%.
"The company's strong momentum continued across the business, generating record revenue for any
second quarter in our history in both the FSS US (food and support services) and International segments," said John Zillmer, Aramark's CEO. Zillmer added that Q2 profit in the international segment set a record as well.
The company earns the No. 3 rank among its peers in the 24-stock Commercial Services-Outsourcing industry group. Cintas is the No. 1-ranked stock in the group.
The exclusive Relative Strength Rating from Investor's Business Daily identifies market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock's price movement over the last 52 weeks holds up against all the other stocks in our database.
Please follow James DeTar on X, formerly known as Twitter, @JimDeTar
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