Deckers Outdoor broke out of a flat base with a buy point of 568.47 on Friday, according to IBD MarketSmith.
Shares gapped up in the strongest volume since the base started forming. At that time, it cleared the 50-day moving average after second-quarter earnings pleased investors. DECK stock is Monday's selection for IBD 50 Stocks To Watch as it hovers in a buy zone. Shares are at an all-time high.
The relative strength line is also at a new high, a bullish indicator. Deckers holds a 47% gain so far this year, beating the S&P 500's gain of 9%.
September-quarter sales grew 25% to $1.09 billion while earnings of $6.82 per share showed an impressive 79% increase. It was the fourth quarter of accelerating earnings growth. Cash and cash equivalents doubled from $419.3 million a year ago to $823.1 million. The company reported that it has no outstanding debt.
For the full fiscal year, the Hoka shoes maker raised its revenue guidance to $4 billion and its midpoint earnings forecast to $23 per share.
Deckers makes athletic footwear and apparel under brands such as Hoka, Ugg, Teva, Sanuk and others. It sells them through specialty and department stores as well as company-owned stores and through its own online store.
The company during the conference call announced plans to divest the Sanuk brand and focus on its winning Hoka and Ugg labels. Sales of Hoka and Ugg rose 28.1% and 27.3%, respectively, during the second quarter, while Sanuk and Teva revenue decreased.
DECK Stock Has Perfect Ratings
Deckers boasts a perfect Composite Rating and EPS Rating of 99 and a Relative Strength Rating of 96. The stock ranks first in the shoe manufacturing group, which has moved up to 78th place among IBD's 197 industry groups from 138th place three weeks ago.
Mutual funds have been net buyers of DECK stock over the past five quarters. Strong institutional support has earned the stock an Accumulation/Distribution Rating of B-. Mutual funds own 64% of shares outstanding. The Lord Abbett Developing Growth (LAGWX) and the Invesco Discovery Fund (OPOCX) funds are among those that hold shares.
Exchange traded funds holding shares include iShares Core S&P 500 Mid-Cap ETF and the First Trust Consumer Discretionary AlphaDEX Fund.
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