The S&P 500 Biotech Giant Vertex leads 5 strong stocks


Your stocks to watch for the week ahead are Energy Cheniere (GNL), a biotech giant in the S&P 500 Vertex Pharmaceuticals (VRTX), Cardinal Health (ACH), steel dynamics (STLD) and Authentic parts (GPC).


As the market remains in correction, with analysts and investors wary of an economic slowdown, these five stocks deserve to be added to watch lists. S&P 500 medical giants Vertex and Cardinal Health resisted as healthcare-related stocks tend to do well in bear markets.

Steel Dynamics and Genuine Parts are both posting strong earnings, with the steel and auto parts sectors reporting optimistic outlook. Meanwhile, Cheniere Energy saw sales explode in the second quarter as demand for natural gas in Europe continues to grow.

Major indices made rally attempts with the Dow Jones and S&P 500 testing weekly support on Friday. With market uncertainty, investors should be prepared for the breakouts of the day and keep an eye on these stocks.

Shares of Cheniere Energy, Cardinal Health and VRTX are all on the IBD ranking.

Cheniere Energy Stock

LNG shares rose 1.1% to 175.79 during Friday market trading. During the week, the stock was up 3.1% off the highs, rebounding from its 21-day and 10-week lines earlier in the week.

Cheniere Energy has been consolidating since mid-September, but needs another week to forge a proper base, with a potential buy point of 182.72 formed on August 10th.

Houston-based Cheniere Energy was IBD Stock Of The Day on Thursday as the largest U.S. producer of liquefied natural gas sees strong demand in Europe.

Even as natural gas prices fall in the United States and Europe, investors still see strong LNG demand for Cheniere and others.

The British government confirmed last week that it was in talks for an LNG purchase agreement with a number of companies, including Cheniere.

In the first half of 2021, less than 40% of Cheniere’s LNG cargoes landed in Europe. This figure rose to more than 70% during the second quarter of this year, even as the company increased its new export capacity. The urgency of the natural gas shortage in Europe has only intensified over the past month. That’s when an explosion disabled the Nord Stream 1 gas pipeline from Russia that once supplied 40% of the European Union’s natural gas.

In the second quarter, sales increased 165% to $8 billion and LNG earned $2.90 per share, compared to a net loss of $1.30 per share in the second quarter of 2021. Company to report results of the third quarter on November 3, with investors seeing booming earnings for the coming quarters. .

Cheniere Energy has a composite rating of 84. It has a relative strength rating of 98, an IBD Stock Checkup proprietary gauge for stock price movement with a score of 1 to 99. The rating shows how a stock’s performance over the past 52 weeks resists all other stocks in the IBD database. The EPS rating is 41.

Summit stock

VRTX stock jumped 3.4% to 300 on Friday, rebounding from a test of its 50-day moving average. Shares climbed 2.2% for the week. Vertex stock formed a tight flat base with an official buy point of 306.05, according to MarketSmith analysis.

The headline has remained constant over the past few weeks, while the relative strength line has trended higher. The RS line tracks a stock’s performance against the S&P 500 Index.

Vertex’s third-quarter earnings are due Oct. 27. Analysts see EPS rise slightly 1% to $3.61 per share with sales up 16% to $2.2 billion, according to FactSet.

The Boston-based global biotech company dominates the cystic fibrosis treatment market. Vertex also has other products in late-stage clinical development that target sickle cell disease, type 1 diabetes and certain genetically caused kidney diseases. This includes a gene-editing partnership with Crispr Therapeutic (CRSP).

In early August, Vertex announced better-than-expected second-quarter results and raised its sales targets for the full year.

The S&P 500 Vertex stock ranks second in the Medical-Biomed/Biotech industry group. VRTX has a composite rating of 99. Its Relative Strength Index is 94 and its EPS Index is 99.

CRISPR stocks: Will risk concerns inhibit gene-editing treatments?

Cardinal Health Stock

CAH stock rose 3.2% to 73.03 on Friday, pulling out a buy point of 71.22 from a shallow base with a handle and hitting a record high. But the volume was light on the breakout. CAH shares jumped 7.3% over the week.

Cardinal Health’s relative strength line has also been rising for months.

The cup base with handle is part of a base-on-base pattern, forming just above a cleared cup base on August 11.

Cardinal Health, based in Dublin, Ohio, provides a wide range of healthcare services and medical supplies to hospitals, laboratories, pharmacies and long-term care facilities. The company says it serves about 90% of hospitals and 60,000 pharmacies in the United States.

The S&P 500 Cardinal Health stock will report its first quarter 2023 results on November 4. Analysts expect earnings to fall 26% to 96 cents per share. Sales are expected to rise 10% to $48.3 billion, according to FactSet.

Cardinal Health shares rank first in the wholesale drug/medical supplies industry group, ahead of McKesson (MCK), which also shows positive action. CAH stock has a composite rating of 94 out of 99. It has a relative strength rating of 97 and an EPS rating of 73.

Dynamic action of steel

Shares of STLD jumped 8.5% to 92.92 on Friday and were up 19% on the week, after Steel Dynamics’ earnings beat Wednesday night.

Shares surged above a consolidation buy point of 88.72 on Friday after breaking a trendline on Thursday. The STLD stock is 17% above its 50-day line, definitely extended from this key average.

Steel Dynamics’ latest consolidation could be seen as part of a broader base going back six months.

Steel Dynamics topped third-quarter earnings views with EPS up 10% to $5.46 while revenue rose 11% to $5.65 billion. The steel producer’s outlook is optimistic despite falling flat-rolled steel prices. STLD reports order activity and order books remain strong.

The Fort Wayne, Indiana-based company is one of the largest producers of carbon steel products in the United States. It engages in metal recycling operations as well as steel fabrication and manufactures a myriad of steel products.

How Millett Built Steel Dynamics From a Three-Employee Company

STLD stock ranks first in the steel producers industry group. STLD stock has a composite rating of 96 out of 99. It has a Relative Strength Rating of 90, an exclusive IBD Stock Checkup gauge for stock price movement that peaks at 99. The rating shows how the performance of STLD stock over the past 52 weeks outperforms all other stocks in the IBD database. The EPS score is 98.

Stock of original parts

GPC stock gained 2.8% to 162.35 on Friday after the company topped earnings views with its third-quarter results on Thursday. For the week, GPC was up 5.1% as the stock held its 50-day line and was in a stable base.

GPC has an official buy point of 165.09 after a three-week rally, according to MarketSmith analysis.

The relative strength line of OEM parts inventory has risen sharply to record highs in recent months.

On Thursday, the Atlanta-based auto parts company raised its forecast for the full year on growth in its automotive and industrial sales.

Earnings per share for Genuine Parts rose 19% to $2.23 and revenue rose 18% to $5.675 billion in the third quarter. GPC’s full-year forecast now calls for EPS of $8.05 to $8.15, down from $7.80 to $7.95. The company now expects revenue growth of 15% to 16%, compared to 12% to 14% previously.

During the Covid pandemic, supply chain constraints caused a major upheaval in the automotive industry, sending new and used car prices to record highs. This has made consumers more likely to keep their existing vehicles longer, leading to increased mileage and increased demand for auto replacement parts.

Other auto stocks O’Reilly Auto Parts (ORLY) and Auto area (AZO) also rallied near buy points amid a struggling market. O’Reilly reports October 26.

IBD ranks Genuine Parts #1 in the Automotive Retail/Wholesale Parts industry group. GPC stock has a composite rating of 96. Its relative strength index is 94 and it has an EPS index of 89.

Please follow Kit Norton on Twitter @KitNorton for more coverage.


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