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Retail sales might have been sluggish in March, but don’t tell that to the Retail-Specialty industry group which has been working its way higher in IBD’s 197 industry group rankings. The group outperformed again Wednesday, rising about 2%. Headed into the session, it ranked 26th, up from No. 99 three weeks ago and No. 146 six weeks ago. The outright leader in the group is Ulta Beauty ( ULTA ), one of a select group of stocks to achieve IBD Sector Leader status due to outstanding fundamentals, among other things. Over the past eight quarters, year-over-year sales growth has averaged just over 21% — impressive for a company with a market capitalization approaching $13 billion. A strong earnings report fueled a bullish gap for the stock on March 11. The stock traded sideways after that, staying in a buy range from a 188.58 buy point. It’s extended now after gapping up again April 8. It may be too late to buy Ulta, but three other names in the group are near buy points as they set up in bases. Sally Beauty ( SBH ) is in the same business as Ulta. While Ulta has a big presence in malls across the U.S., Sally Beauty locations are more prominent in strip malls. In terms of store locations, Sally operates more than 4,800 stores worldwide, compared with nearly 900 locations for Ulta. Despite more locations, Sally’s market capitalization of $4.6 billion is much smaller than Ulta’s at nearly $13 billion. Its fundamentals story isn’t as compelling, either, with a five-year annualized earnings growth rate of 11% and sales growth rate of 5%. Still, Sally Beauty is working on a long cup-with-handle base with a 33.03 buy point. Arts and crafts retailer Michaels ( MIK ), with a Composite Rating of 91, is working on a long cup-with-handle base with a 28.89 buy point. On the weekly chart, the handle formed during the week ended March 25. Michaels shows four straight quarters of double-digit earnings growth, but single-digit sales growth leaves something to be desired. That said, sales growth accelerated when the company reported fiscal Q4 results in March. Sales rose 5% to $1.68 billion, up from 3% growth in Q3. For the current quarter, sales are expected to accelerate again, rising 8% to $1.17 billion. Last week, industrial auctioneer Ritchie Bros. Auctioneers ( RBA ) said it sold more than $1 billion worth of equipment, trucks and other assets in the first quarter, up 6.8% from the year-ago period. It has climbed to within 9% of a 52-week high as it works on the right side of a long consolidation. Earnings and sales growth declined in the latest reported quarter, but a Composite Rating of 87 is helped by solid annual pretax margin and return on equity in 2015. To its credit, Ritchie Bros. boasts a couple of top-notch fund sponsors: Primecap Odyssey Aggressive Growth Fund ( POGRX ) and T. Rowe Price New Horizons Fund ( PRNHX ). Scalper1 News
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