Semiconductor stocks are in the chips again and highly ranked STMicroelectronics is among the leaders. It recently completed a long cup-with-handle base, possibly setting up for a big run higher. On Thursday, the Relative Strength (RS) Rating for STMicroelectronics stock climbed into a higher percentile, as it got a lift from 63 to 78. Chips as a group were leading a powerful rally Thursday.
The upgraded 78 Relative Strength Rating puts STMicroelectronics just a couple of points below the benchmark where many stocks start their biggest runs. IBD market research shows that the best stocks to buy and watch often have an RS Rating over 80 in the early stages of their moves. See if STMicroelectronics can continue to rebound and clear that threshold.
Looking For The Best Stocks To Buy And Watch? Start Here
Switzerland-based STMicroelectronics makes a variety of chips used in practically every market, including autos, home electronics, medical equipment, industrial equipment and more. "As a pioneer in the IoT (Internet of Things) transformation and big data, we are making integrated, secure and reliable technologies accessible for our customers," the company says on its website.
STMicroelectronics stock in February completed a long cup-with-handle pattern that began in November 2021, but it hasn't been able to break out yet. The chipmaker dropped to a 28.35 low on July 5 last year and roughly doubled from there to a 53.53 high on March 31. It's consolidated from there and traded at 44 Thursday afternoon, up 4% for the day and on track for its fourth higher close in the last five trading sessions.
STMicroelectronics Stock Among Best Overall
Among its other ratings STMicroelectronics boasts a near-perfect 97 Earnings Per Share Rating out of 99. It also has a 93 Composite Rating. IBD's Composite Rating combines five other key ratings to spotlight companies with outstanding fundamental and technical metrics. STMicro also carries an A SMR Rating (sales + profit margins + return on equity) and a C Accumulation/Distribution Rating. The C A/D Rating means about as many funds are buying its shares as selling.
STMicro reported 39% earnings growth last quarter to $1.10 per share. The prior three periods its EPS rose 109%, 127% and then 61%. Its revenue growth has tracked higher during that time too. Sales rose 20% in its most recent quarter, to $4.25 billion.
Ranks No. 2 In Group
STMicroelectronics stock holds the No. 2 rank among its peers in the Electronics-Semiconductor Manufacturing industry group. STMicroelectronics and ON Semiconductor are also among the group's highest-rated stocks.
When looking for the best-performing stocks, one factor to watch closely is relative price strength.
IBD's proprietary Relative Strength Rating measures market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock's price behavior over the last 52 weeks compares to all the other stocks in our database
Please follow James DeTar on Twitter @JimDeTar
