Shares of pharmaceuticals company Dr. Reddy's Laboratories rose to an all-time high last month and continue to trade near that level. On Tuesday the IBD Relative Strength Rating for Dr. Reddy's stock rose to 84, up from 80 at the end of last week, putting it in an elite group of stocks.
Dr. Reddy's is a one-size-fits-all pharma company. It develops the ingredients that drugmakers need to formulate their drugs. But it also markets its own branded generics and non-branded generic drugs too.
Dr. Reddy's Joins Winner's Circle
Its upgraded 84 Relative Strength Rating puts Dr. Reddy's among the top 16% of all stocks for price performance over the past year, and makes it a possible stock watchlist candidate. It's a notable upgrade too because market research shows the market's biggest winners tend to have an 80 or better RS Rating in the early stages of their moves.
Looking For The Best Stocks To Buy And Watch? Start Here
Dr. Reddy's Labs stock rose to an all-time high 84.46 on Aug. 9. It had formed a flat base from February to July, rose above the base's 77.72 buy point, and continued rising. At the beginning of August it rose out of the buy zone. Tuesday afternoon it was down about 3% amid the stock market sell-off. The drop puts it back in the buy zone, but IBD generally recommends against buying when the market is correcting heavily.
Slight Earnings Dip A Fluke?
Earnings for Hyderabad, India-based Dr. Reddy's dropped 2% last quarter to $1 per share on a year-over-year basis. But the slight dip came after it reported gains of 30%, 10% and 34% the prior three quarters. Its revenue growth rate doubled over the last three quarters, rising from 6% to 11% and then 12% last quarter, to $920.4 million.
Investors have taken notice of the strong numbers and bid its stock up. Among its other readings Dr. Reddy's has a dynamic 88 EPS Rating, putting it in the top 12% of all companies for recent and long-term profit growth.
Its overall Composite Rating is also 88 and it carries a B- Accumulation/Distribution Rating on an A+ to E scale. The B- rating shows that institutions like mutual funds and university funds are buying more of its shares than selling.
Dr. Reddy's earns the No. 3 rank among its peers in the 19-stock Medical-Generic Drugs industry group. Collegium Pharmaceutical is the No. 1-ranked stock in the group.
IBD's proprietary RS Rating tracks technical performance by using a 1 (worst) to 99 (best) score that identifies how a stock's price action over the trailing 52 weeks matches up against that of all other stocks.
Please follow James DeTar on X, formerly known as Twitter, @JimDeTar
RELATED:
IBD Stock Rating Upgrades: Rising Relative Strength
Get Full Access To IBD Stock Lists And Ratings
Why Should You Use IBD's Relative Strength Rating?
IBD Live: A New Tool For Daily Stock Market Analysis
Ready To Grow Your Investing Skills? Join An IBD Meetup Group!
