The IBD Screen of the Day makes it easy for investors to spot emerging leaders. But what do you track? There are several indicators of strength, and savvy investors check several before buying a growth stock.
IBD's relative strength line is one such indicator.
The RS line compares the performance of the stock with the S&P 500. A rising RS line shows the stock is outperforming the bellwether index. When the line is at its 52-week high, that is a double show of strength.
The Relative Strength At New High screen in IBD Stock Screener helps spot those leading growth stocks.
Growth Stock Enters Buy Zone
Among those in the screen, Knight-Swift Transportation is in a buy zone in a cup-with-handle base with a buy point of 58.21. Its RS line is at a new high. Shares surged in huge volume on Friday.
Though Knight-Swift is not your traditional growth stock, remember that growth can occur in unlikely corners. The company went through a growth spurt in the supply-chain boom of 2021 and 2022. But analysts expect earnings to fall 19% this year.
Tools like IBD's Screen of the Day help you go beyond the usual growth list to find attractive entries.
The trucking group stands 95th among IBD's 197 industry groups. KNX's Composite Rating is 86 while its Relative Strength Rating is 87. A rating above 80 is usually a good indicator. More importantly, the RS Rating has increased dramatically from three months ago.
In the fourth quarter, sales declined 4% as the company booked $1.7 billion in revenue. Earnings per share of $1 were down a sharper 38%. Nonetheless, shares surged on Friday after earnings.
Autonomous Trucks (Not Tesla)
The Phoenix, Ariz.-based trucking company has been making some right moves lately. It added autonomous trucks through the Truck Transfer Program in partnership with San Francisco-based Embark.
Knight-Swift drivers will drive Embark-powered trucks that seek to improve performance and reliability on the road. The Truck Transfer Program will allow company drivers to assess what works and what does not in autonomous driving software for long and shorter hauls. The initial run of the autonomous trucking project is along the Los Angeles-Phoenix lane.
Knight-Swift is a diversified freight carrier company. Its acquisition of MME holdings for $150 million in cash in December 2021 helped the company get into the less-than-truckload (LTL) segment.
The company added 460 tractors and 930 trailers to its fleet as a result. MME operates in the Midwest and Northwest U.S. The addition complemented KNX's coverage of the Southeast region. In July, it entered the LTL business by buying AAA Cooper and added 3,000 tractors and 7,000 trailers to its basket. AAA Cooper serves 3,400 locations in the Southeast and Midwest.
Mutual funds own 57% of the growth stock. The stock also has a top-notch Accumulation/Distribution Rating of A-, which indicates strong interest from big money. Exchange traded funds have been buying KNX shares as well.
The iShares Core S&P Mid Cap ETF and SPDR S&P Transportation ETF hold shares of Knight-Swift Transportation.
For more news on growth stocks, please follow VRamakrishnan on Twitter @IBD_VRamakrishnan
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