The restaurants group ranks a lofty No. 7 on IBD's list of 197 industry groups. Group member Jack in the Box recently set itself up for further growth with its acquisition of Del Taco Restaurants. On Wednesday the Relative Strength (RS) Rating for Jack in the Box stock jumped from 87 to a top-tier 91, out of 99.
Jack In The Box Stock Pops
Market research has shown that the best stocks to buy and watch often have an RS Rating over 80 as they launch their largest climbs. Jack's sizzling growth just lifted it higher in that elite group.
Watchlist candidate Jack in the Box stock shot up 79% from a 54.80 low on June 30 to 97.99 on May 17. In the week since then, it's dropped in sync with market uncertainty. The question now is: Can Jack in the Box return to its multimonth climb or is it headed lower?
Earnings grew 27% for its fiscal second quarter, reported on May 17, to $1.47 per share. Revenue grew a milder 23% on a year-over-year basis to $395.7 million. However that came on the heels of 48%, 45% and 53% sales growth the prior three quarters.
"The momentum in our business continued throughout the second quarter," said Darin Harris, Jack in the Box CEO, in the fiscal Q2 earnings release. He added that the momentum was "reflected in outstanding sales, positive net unit growth," and improved margin performance. Harris also noted the company signed a development agreement for expansion into Mexico.
Additionally, on March 8 the company announced it completed its purchase of Del Taco Restaurants. The move enables Jack in the Box to expand its market reach into the fast growing Tex-Mex segment.
Worth Looking At, Not Necessarily A Buy Right Now
Despite the rapid upward movement in its share price, Jack in the Box stock is not currently showing a potential entry point. See if the stock goes on to form a sound pattern such as a three weeks tight or a cup-with-handle base that could launch a fresh climb. Shares closed at 91.08 Wednesday, down nearly 1%.
Looking For The Best Stocks To Buy And Watch? Start Here
Jack in the Box stock earns the No. 15 rank among its peers in the Retail-Restaurants industry group. Chipotle Mexican Grill, Chuy's Holdings and Texas Roadhouse are among the top 5 highly rated stocks in the group.
When looking for the best stocks, one factor to consider is the company's relative price strength vs. other stocks. The exclusive Relative Strength Rating from Investor's Business Daily measures price performance with a 1 (worst) to 99 (best) score. The grade shows how a stock's price movement over the last 52 weeks stacks up against all the other stocks in our database.
