Tuesday's IBD 50 Stocks To Watch pick, Darling Ingredients, is one of the top stocks to buy and watch. It is breaking out today past a new buy point amid Tuesday's stock market climb. Darling stock rallied almost 2% Tuesday midday, just above the latest buy point.
Stocks To Buy And Watch: Darling Ingredients
Irving, Texas-based Darling Ingredients produces sustainable natural ingredients from edible and inedible bio-nutrients. It offers a range of ingredients and customized specialty solutions, such as feed and fuel ingredients, collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides.
On May 10, Darling reported strong first-quarter earnings and sales growth. Earnings rose 27% year over year to $1.14 per share. Revenue jumped 31% to $1.36 billion.
"We're carrying solid momentum into 2022. Global supply chain challenges remain, while increased labor and energy costs are being addressed by our formula and spread pricing and finished products. Pricing remains robust around the world," said Chief Executive Randall Stuewe in the quarterly earnings transcript.
He continued, "Looking ahead, the business environment remains very favorable for Darling Ingredients. Rendering volumes are robust and growing with no sign of depopulating or hard reductions. Despite global supply chain concerns, we are optimistic as we have seen some improvement and better raw material availability."
Join IBD experts as they analyze leading stocks in the stock market rally on IBD Live!
Darling's IBD Stock Ratings
Darling shows a hefty 97 out of 99 Earnings Per Share Rating and a best-possible SMR grade of A, according to IBD Stock Checkup. The SMR Rating analyzes a company's sales, margins and return on equity, and offers a letter grade from A (the best) to E (the worst). The company's steady double-digit sales growth in recent quarters aided the SMR Rating.
Meanwhile, DAR stock boasts a 98 out of a perfect 99 IBD Composite Rating. Investors can use the IBD Composite Rating to easily gauge the quality of a stock's fundamental and technical metrics.
Stock Market ETF Strategy And How To Invest During An Uptrend
Darling Stock Eyes Buy Point
Darling stock is breaking out past a cup-with-handle's 85.02 buy point, according to MarketSmith pattern recognition, making it one of the top stocks to buy and watch in today's market. Shares are just above that entry amid Tuesday's nearly 2% rally. The handle, meeting the minimal length of five sessions, can be seen on the daily chart but not on the weekly.
A potential flaw is the breakout day's lackluster volume. Today's volume was tracking sharply below average. Ideally, volume should increase at least 40%-50% above average to indicate big institutional demand. The 5% buy area goes up to 89.27.
A key strength is the stock's relative strength line. Its RS line hit a new high Tuesday, confirming the stock as a market leader. A strong RS line during the beginning stages of a new market uptrend is a strong technical indicator.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.
