Aris Water Solutions (ARIS) surged to new highs this week, breaking out past its latest buy point. That makes Aris stock one of the best names to buy and watch on Investor's Business Daily's Stock Spotlight screen.
The company recycles the water produced in oil and gas operations. Aris works primarily in the Permian Basin of Texas and New Mexico, a drilling area known for a high ratio of produced water to oil. Its major clients include ConocoPhillips (COP) and Chevron (CVX).
↑ X NOW PLAYING This Method Helps Find Stocks That Outperform The Market Over YearsThe widely used practice of hydraulic fracturing requires plentiful amounts of water. Most of that water is returned to the surface and must be either disposed of or recycled. That's where Aris comes into play.
Aris Water Solutions says it has helped oil companies reduce groundwater withdrawals by more than 270 million barrels over the past three years by promoting water sustainability. The company has an extensive network of 745 miles of pipelines, pumps and facilities.
In its latest quarterly report, Aris said it earned 34 cents per share on revenue of $112.3 million, year-over-year increases 48% and 13%, respectively. Both the earnings and sales growth increase accelerated from the previous quarter.
"Aris had an exceptional third quarter as we continued to grow our produced water volumes, increased our recycled water sales and maintained our strong margins," Aris Chief Executive Amanda Brock said in the company's earnings press release.
Brock added: "As we anticipated, our capital investment to support these increased activity levels was primarily deployed in the first half of the year and our capital spending in the third quarter declined significantly. We continue to experience steady volume growth and increasing cash generation."
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On Wednesday, Aris stock surged to new highs, continuing its rebound from the 50-day line and breaking out past a 27.94 buy point in a cup base, according to IBD MarketSurge chart analysis. The 5% buy zone runs up to 29.34, so shares remain in buying range.
Bullishly, the relative strength line hit new highs on the breakout day. That triggers the RS line blue dot signal.
The RS Line Blue Dot feature combines the relative strength line with MarketSurge Pattern Recognition. When a stock's RS line hits a new high while the stock is forming a base or breaking out, then the Blue Dot appears on the MarketSurge weekly or daily chart. Further, the RS line is the blue line on all IBD daily and weekly charts as well as in MarketSurge charts.
IBD readers should focus on stocks whose RS lines are hitting new highs during a stock's base formation or on the actual breakout. These stocks get institutional support during both weak and strong market environments.
IBD Stock Checkup shows that Aris stock boasts a strong IBD Composite Rating of 97 out of a best-possible 99. That makes it one of the best stocks to buy and watch right now.
Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on the Dow Jones Industrial Average, the stock market today and the best stocks to buy and watch.
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