The IBD SmartSelect Composite Rating for Advance Auto Parts (AAP) increased from 93 to 96 Tuesday. The new rating shows the stock is outpacing 96% of all stocks when it comes to the most important stock-picking criteria.
The market’s biggest winners often have a 95 or higher grade in the early stages of a new price run, so that’s an important benchmark to look for when looking for the best stocks to buy and watch.
Advance Auto Parts broke out earlier, but has fallen back below the prior 210.28 entry from a cup without handle. In the case where a stock breaks out then falls 7% or more below the entry price, it’s considered a failed breakout. If that happens, it’s best to wait for a new base to take shape.
One weak spot is the company’s 78 EPS Rating, which tracks quarterly and annual earnings-per-share growth. Look for that to improve to 80 or better to show it’s in the top 20% of all stocks.
Its Accumulation/Distribution Rating of C shows a roughly equal amount of buying and selling by institutional investors over the last 13 weeks.
In Q1, Advance Auto Parts reported 234% earnings growth. Revenue growth climbed 23%, up from 12% in the prior report. That marks four quarters of rising growth.
The company’s next quarterly report is expected on or around Aug. 18.
Advance Auto Parts holds the No. 3 rank among its peers in the Retail/Wholesale-Auto industry group. Copart (CPRT) is the top-ranked stock within the group.
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