Ares Capital had its Relative Strength (RS) Rating upgraded from 69 to 76 Tuesday -- a welcome improvement, but still shy of the 80 or better score you look for.

When looking for the best stocks to buy and watch, be sure to pay attention to relative price strength.

IBD's proprietary RS Rating tracks market leadership by showing how a stock's price action over the last 52 weeks compares to that of the other stocks in our database.

Decades of market research shows that the best stocks typically have an RS Rating north of 80 as they launch their largest runs. See if Ares Capital can continue to show renewed price strength and clear that threshold.

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Ares Capital is building a flat base with a 20.56 entry. See if the stock can clear the breakout price in heavy trading.

Top and bottom line growth moved higher in the company's most recent quarter. Earnings were up 36%, compared to 5% in the prior report. Revenue increased from 6% to 31%.

Ares Capital earns the No. 41 rank among its peers in the Finance-Investment Management industry group. Focus Financial and Virtus Investments are also among the group's highest-rated stocks.