A glance at the weekly chart for top-ranked leather handbags and accessories maker Tapestry shows it's gone nearly vertical the last couple of months. It closed higher in 11 of the past 13 weeks. On Tuesday, the Relative Strength (RS) Rating for Tapestry stock shot up to a higher percentile, rising from 78 to 82.
New York-based Tapestry is the parent company for high-end brands Coach, Kate Spade and Stuart Weitzman.
Tapestry Stock No. 1 In Apparel
Tapestry holds the No. 1 rank among its peers in the 29-stock Apparel-Clothing Manufacturing industry group, according to IBD Stock Checkup. Ralph Lauren and G-III Apparel are also among the group's highest-rated stocks.
The upgrade to an 82 RS Rating puts Tapestry in the top 18% of stocks for price performance. It tops a key benchmark because market research shows that top-performing stocks typically have an RS Rating of at least 80 in the early stages of their moves.
However, Tapestry's fundamentals are less than ideal. Tapestry showed 6% EPS growth in its most recent report to 84 cents. Sales were flat with last year at $1.513 million. The prior two quarters its EPS rose 53% and then 22%. During that time its revenue rose just 5% and then was flat. Keep an eye out for the company's next round of numbers on or around Feb. 8.
Among its other ratings Tapestry stock has a 90 Composite Rating. IBD's Composite Rating score combines five separate proprietary ratings into one. The best growth stocks have a Composite Rating of 90 or better.
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Big Funds Accumulating Shares
The clothing company also has an 86 Earnings Per Share Rating. Its B SMR Rating (sales + profit margins + return on equity) on an A-to-E scale with A terrific and E dismal reflects strong fundamentals. However, much of that is attributable to a single outstanding quarter.
Additionally, Tapestry stock has an excellent A- Accumulation/Distribution Rating, a gauge of institutional investing. The A- rating shows strong buying by hedge funds, insurance companies and the like.
Tapestry stock has traded in a fairly narrow range for the past year. It's trying to complete a consolidation pattern with a 47.48 entry. See if the stock can break out in heavy trading. On Tuesday the stock climbed 1.6% to 41. It's up about 58% since Nov. 1.
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