The stock market rally has been impressive since the April 22 follow-through day. Several top-rated growth stocks that were building bases on or around that day have made remarkable gains since then.
Another reason behind the market's recent strength is that it hasn't been only one or two stocks leading an industry group's move. Instead, leadership in many of the market's top-performing groups has been broad-based. It's a good reminder for investors to consider industry group strength when evaluating stocks. The broader the leadership in the group, the better.
Whether it's been top performers in the security software group like Zscaler or VeriSign, or big leaders in the aerospace and defense group like Howmet Aerospace or GE Aerospace, leadership has been stellar and broad-based in many of the strongest performing groups.
Stock Market Leadership
New names asserting strength in the stock market every day are on display daily in Stocks On The Move on the homepage of investors.com. REV Group, a strong performer in the building-mobile/manufacturing & RV group, appeared on the screen Tuesday. The stock rallied nearly 2% in strong volume ahead of its earnings report early Wednesday.
See Which Stocks Are In The Leaderboard Model Portfolio
But those who went to the quote page for REV Group and clicked the blue checkmark at the top of the daily chart immediately saw why the group ranked near the bottom of IBD's 197 Industry Group Rankings.
A quick look at the group showed REV as the No. 1 stock in the group based on a Composite Rating of 82. Cavco Industries was ranked No. 2 with a lowly Composite Rating of 61. That was an immediate sign that the group wasn't so strong. The market's strongest groups will have no shortage of stocks with Composite Ratings in the high 90s. It's possible that lone wolves in a sector like REV Group can continue to lead the market. But it's generally best to focus on groups where leadership is broad-based.
With MarketSurge, you can view the top-performing industry groups on any given day. You can also sort each group by the day's top performers. Or you can sort by Composite Rating, to gauge group leadership.
No Shortage Of Leaders In Gold
The accompanying table shows the current top performers in the gold group. Notice the number of best-possible Composite Rating scores of 99, as well as top-notch scores for sales growth, profit margins and return on equity.
Agnico Eagle Mines joined the Leaderboard model portfolio on May 21 as the gold producer rallied above its 50-day moving average. Now, it's near the top of a six-week cup base with a 126.76 entry. South African gold miner AngloGold Ashanti is also near the top of a cup base with a 46.90 entry.
Orla Mining, a recent addition to IBD's exclusive Sector Leaders screen, is also near the top of a cup base. Last month, the company reported a 140% surge in quarterly profit, with revenue up 109% to $140.7 million.
Follow Ken Shreve on X @IBD_KShreve for more stock market analysis and insight.
