Solar energy company Daqo New Energy is a bit of an odd duck. It boasts triple-digit sales and profit growth, and best-possible technical and fundamental ratings. Yet, its stock has languished the past year, basically moving sideways. On the plus side, Daqo stock got another upgrade to its Relative Strength (RS) Rating Wednesday to 86, up from 81 the day before. As reported earlier, Daqo rose above the 80 benchmark just one day ago.
The 86 RS Rating means Daqo stock performed in the top 14% of all stocks over the past year. It's a significant number because market research shows that the market's biggest winners often have an 80 or better RS Rating as they begin their biggest climbs. Its related relative strength line has also risen. Look for that line to touch or rise above its all-time high prior to Daqo stock climbing to a new high.
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Among its other key ratings, Daqo stock has a best-possible 99 EPS Rating, and an outstanding 98 Composite Rating. The Composite Rating combines five separate proprietary IBD ratings, based on key fundamental and technical criteria, into one easy-to-use score. The best growth stocks have a Composite Rating of 90 or better.
Additionally, China-based Daqo New Energy has an A SMR Rating (sales+profit margins+return on equity) on an A-to-E scale with A tops. One yellow flag — its Accumulation/Distribution Rating is D, on an A+ to E scale, indicating that institutional investors such as mutual funds and insurance company funds are not buyers yet.
Wednesday afternoon, Daqo was down 1.4%, near 55, after being down as much as 3% earlier amid market consolidation. That 55 price is up significantly from its 2022 bear market low 32.20 in mid-March. On the other hand, it's little changed from its 57.30 close on Oct. 5, 2021. Although Daqo stock may be forming a fresh pattern, now is not an ideal time to jump in since it isn't near a proper buy zone. See if the stock is able to form a consolidation and break out.
The maker of high-quality silicon disks and other products for solar energy systems reported 167% EPS growth last quarter to $8.18 per share. The prior three months its EPS grew 999%-plus, 83% and then 524% year over year. Sales in its most recent quarter grew 182% to $1.24 billion. Keep an eye out for the company's next round of numbers on or around Oct. 28.
Daqo stock earns the No. 2 rank among its peers in the Energy-Solar industry group. Enphase Energy and Jinko Solar are also among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
This proprietary Relative Strength Rating tracks technical performance by using a 1 (worst) to 99 (best) score that indicates how a stock's price performance over the last 52 weeks matches up against other publicly traded companies.
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