Today’s IBD screen highlights stocks that show signs of increasing institutional accumulation. Today, the focus is on three growth stocks that are on the list of stocks the funds buy. They understand Novo Nordisk (NVO) in the ethical pharmaceutical industry group and Alliance Resource Partners (ARLP), a leader among coal stocks.
Large purchases by mutual funds, hedge funds, banks, insurers, pension plans and others are doing a lot to support the long-term price increases of large stocks. IBD research has found this factor to be critical in finding the best stocks. Strong institutional accumulation satisfies the I of CAN SLIM, IBD’s seven-point paradigm for successful growth investing.
Meanwhile, Ryan Specialty (RYAN) went public about a year ago. The stock forms a consolidation with a buy point of 42.53. The RS line is close to the highs, which is positive. Over the past three weeks, the stock has been making tight weekly price closes, another bullish sign.
Stock buyback, bullish technical indicators for NVO
Novo Nordisk specializes in diabetes care. It has been buying back shares since February 2022. The Danish company plans to buy back shares worth 24 billion Danish kroner (DKK), ($3.27 billion), over a period of 12 months.
Novo Nordisk’s American Certificates of Deposit (ADR) form a shallow bowl base that is too deep to serve as a flat base.
This new pattern shows an entry point at 122.26, which is 10 cents above the high on the left side of the base. The developer of human insulin, insulin analogues and oral antidiabetics also boasts a relative strength rating of 94.
NVO also boasts a strong composite rating of 97. It also ranks 3rd in the group of medical-ethical drugs, according to IBD Stock Checkup.
The company beat estimates in the first quarter of 2022, largely due to increased sales of its diabetes and weight management drugs. Earnings rose 8% to 93 cents per share on a 17% jump in revenue to $6.25 billion.
Fund ownership has increased for four consecutive quarters. Last quarter, 279 funds held NVO shares, compared to 273 in the first quarter.
Coal Stocks Today: ARLP’s bull run continues
In the energy-coal group, Alliance Resource Partners (ARLP) is close to a suitable buy point of 21.34 in a handleless six-week cup. Stocks tried Monday to clear the entry. But later in the day, the ARLP pulled back along the market to end just below the pivot point. ARLP rose 0.7% for the day in strong turnover.
Based on pattern analysis, the stock is in the third leg of its run, climbing back to its pandemic lows in 2020. The ARLP Composite Rating and Relative Strength Rating of 99 indicate its performance. superior.
Coal stocks have rebounded since the disruption of energy supplies in Europe caused by the war pushed the region to seek alternatives to Russian fossil fuels.
ARLP is expected to release its second quarter results on July 25. This report should provide a clearer picture of the impact of rising energy prices and inflationary pressures on company earnings.
Fund ownership has increased at Alliance Resource for at least the last three quarters. A total of 31 mutual funds held ARLP last quarter, according to data from MarketSmith.
Mergers drive RYAN’s growth
Beyond coal stocks, the insurance brokerage industry has witnessed several mergers and acquisitions along with the growing adoption of technology.
Ryan Specialty ranks second among IBD’s group of insurance brokers, agents and carriers. Since its IPO in July last year, RYAN has consolidated and is close to a buy point of 42.53.
The relative strength line has gradually increased and is now near historical highs. The stock posted wide-spaced weekly price closes, indicating stronger near-term consolidation that bodes well.
It has a composite rating of 96 and an RS rating of 95.
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