Auto dealership and collision repair center operator Sonic Automotive has stayed profitable every quarter of the pandemic, though sales declined in the early quarters last year. Sales revved up by end of the year and profit roared 55% higher, to a record, in the final quarter. As a result, the Relative Strength (RS) Rating for Sonic Automotive (SAH) climbed to 73 Tuesday, up from 69.
Although Sonic may have turned the corner, its stock may need more work before it breaks out again. The market’s biggest winners typically have an RS Rating north of 80 in the early stages of their moves. See if Sonic Automotive can continue to rebound and hit that benchmark.
However, although its stock relative strength vs. other stocks is still in the good-but-not great group, other key metrics point to rising strength. For example, Sonic boasts a 91 EPS Rating, on a 1-99 scale with 99 tops. The 91 EPS Rating reflects its string of four profitable quarters in an extremely challenging market.
Also, Sonic has a strong 83 Composite Rating, comprised of five key technical and fundamental metrics. And its Accumulation/Distribution Rating of B, on an A+ to E scale, denotes moderately strong buying of Sonic stock by institutional investors.
On Feb. 17 the company reported that fourth quarter earnings grew 55% year over year to $1.50 per share, on a 2% rise in revenue to $2.8 billion.
In a news release, Sonic President Jeff Dyke at the time cited a rebound in customer activity and sales of both new and used cars in the second half of 2020 for the results.
He added that, “These trends have continued into early 2021 and we believe we are well on the path to more than double the company’s total revenues and significantly increase profitability over the next five years.”
The company holds the No. 6 rank among its peers in the Retail/Wholesale-Auto Parts industry group. Lithia Motors (LAD) and Asbury Automotive (ABG) are also among the group’s highest-rated stocks.
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Sonic Automotive is trying to complete a consolidation with a 49.31 entry. See if it can clear the breakout price in volume at least 40% above average.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
This exclusive rating from Investor’s Business Daily tracks share price action with a 1 (worst) to 99 (best) score. The score shows how a stock’s price performance over the last 52 weeks stacks up against all the other stocks in our database.
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