A rule of combat states that it is necessary sometimes to take half a step back to move two steps forward. That can be a winning strategy for stocks as well.
Pilgrim’s Pride (PPC) has been making similar retreats and advances, guarding its all-time high. On the daily IBD MarketSurge chart, the stock’s retreats and advances have produced a rare ascending base.
But on the weekly chart, the stock shows a flat base. Both are third-stage bases and have the same buy point of 55.50, which is derived from the stock’s all-time high.
Shares have gained 74% year to date, as of Wednesday’s closing price.
Although sales growth has been in single digits over the past three quarters, earnings growth has been in triple digits. That has boosted the EPS Rating to 96 — the best among the 14 stocks in the food and meats group.
Third quarter sales grew 5% to $4.6 billion while earnings of $1.63 per share soared 181% from the prior year. Analysts expect earnings growth of 198% for the full year to $5.04 per share. But they also expect a 14% decline in 2025 to $4.32 per share.
The Composite Rating also stands at 96, while the Relative Strength Rating of 92 shows the stock’s outperformance compared with the thousands of stocks in the Investor’s Business Daily database over the past 52 weeks.
But more recent action shows the stock has some catching up to do with the S&P 500 as the relative strength line has started lagging. Also on Wednesday, the stock undercut the 50-day moving average, although the base remained intact.
Spot Bases And Buy Points With Pattern Recognition
Pilgrim’s Pride makes poultry products under various brands. It ranks second among 14 companies in the food and meat products industry group.
Mutual funds own 79% of shares outstanding. The number of funds that own shares has gone up each of the past three quarters.
The stock also holds an Accumulation/Distribution Rating of B, which shows net buying by big funds in recent weeks.
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