Decking and fencing maker Trex (TREX) has been a long-term leader with its distinctive flooring materials. On Monday the Relative Strength (RS) Rating for Trex stock jumped into a new percentile, climbing to 83, up from 80 the prior trading session. It’s benefiting a couple of ways. The economy is recovering, and the housing and home upgrade markets are growing even faster, driving up sales and profits.
The 83 RS Rating means that Trex stock is outperforming 83% of all stocks. Market research shows that the best stocks often have an RS Rating north of 80 as they begin their biggest climbs.
Other Key Trex Stock Ratings
Among other key ratings, Winchester, Va.-based Trex has a 90 EPS Rating, on a 1 to 99 scale with 99 the best. The 90 rating reflects strong recent and long-term profit growth. Additionally, Trex stock boasts a superb 97 Composite Rating. Trex makes wood-alternative flooring, decking, railing and fencing products.
IBD’s Composite Rating combines five separate proprietary ratings of fundamental and technical performance into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
In terms of fundamentals, earnings per share grew 29% last quarter, up from 17% in the prior report. Revenue jumped 41% to $311.6 million. Trex stock closed at 109.29 Monday after surging from a 28.11 intraday low in late March 2020. Longer term, its stock has increased thirteenfold from 8.15 in early 2016.
Trex holds the No. 7 rank among its peers in the Building-Construction Products/Miscellaneous industry group. TopBuild (BLD), Builders FirstSource (BLDR) and Tecnoglass (TGLS) are also among the group’s highest-rated stocks.
Trex is building a consolidation with a 111.14 entry. See if it can break out in volume at least 40% higher than normal. It’s a later-stage pattern, and investors should be aware that those involve more risk.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
This proprietary rating measures technical performance by showing how a stock’s price action over the last 52 weeks compares to that of the other stocks in the IBD database.
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