In Tuesday's IBD Screen of the Day, the focus is on top stocks that have hit new highs on their Relative Strength Ratings. 20 names pop up after taking a glance at the screen. Combing further in MarketSmith charts, two stocks rise to the top and are poised to break out: Regal Rexnord and Dollar General.
Electrical power-equipment maker Regal Rexnord has formed a big cup with handle and traded shy of a 151 buy point on Tuesday. It has also gained support above its 50-day and 200-day moving averages.
Its relative strength line just hit a new high, flashing a blue dot on its daily MarketSmith chart.
The 92 RS Rating has moved up steadily from 82 a week ago, 70 last month and 36 three months ago.
The stock also sports a Composite Rating of 97, and an 84 EPS Rating, meaning its recent quarterly and annual earnings growth are outpacing 84% of all stocks. The company posted a 3% EPS gain for Q2. Revenue growth came in at 52%, down from 60% in the previous quarter.
Regal Rexnord Shines, Boasts Fresh Relative Strength Highs
Regal Rexnord earns the No. 3 rank among its peers in the Electrical Power/Equipment industry group, according to IBD Stock Checkup. Franklin Electric is the top-ranked stock within that subsector.
Discount retailer Dollar General has also hit a new relative strength high, climbing to a 92 RS Rating a week ago, before dipping slightly on Tuesday.
The stock is forming a flat base with a buy point of 259.75. DG stock has successfully completed three back-to-back, cup-with-handle bases over the past year.
The relative strength line compares a stock's price action that of the S&P 500. A rising line tells you its outperforming the benchmark index while a falling line denotes growing weakness.
The stock gained support Monday by moving above its 50-day line but fell back on Tuesday. It still has support from its 21-day line and 200-day moving average.
Dollar General has done well this year, with rising inflation underpinning discount retail sales. Consumers have sought discount stores to cut costs charged by upscale grocery stores, department stores and even online retailers.
Top Stock Dollar General Maintains Leadership Position
Dollar General's Q2 earnings rose 10.8% to $2.98 per share. And revenue climbed to $9.425 billion, with both numbers beating analyst forecasts.
Inventories rose 25.1% on a per-store basis to a total of $6.9 billion while same-store sales increased 4.6% year over year.
DG is ranked fourth in the IBD Retailer-Discount industry group, behind other top stocks BJ's Wholesale, Grocery Outlet and Dollar Tree.
Finding Top Stocks
With thousands of names to choose from, how can you efficiently find the top stocks to buy and watch?
For starters, zero in on top growth stocks that fit your criteria with IBD Stock Screener.
And investors can build their own screens from scratch, or start with IBD stock lists, especially the IBD 50, Sector Leaders, Big Cap 20 and IPO Leaders.
From earnings and sales growth to IPO date, dividend yield, current quarter EPS estimates and more, the screener is a valuable tool.
Follow Michael Molinski on Twitter @IMmolinski
