Your stocks to watch for the coming week are Chen energy (LNG), S&P 500 biotech giant Apex Pharma (VRTX), cardinal health (CAH), steel dynamics (STLD) and original parts (GPC).
As the market continues to correct and analysts and investors fear an economic downturn, these five stocks are worth noting. S&P 500 medical giants Vertex and Cardinal Health have held up well, as healthcare-related stocks tend to do well in down markets.
Steel Dynamics and Genuine Parts both post strong gains as both the steel and auto parts industries report upbeat prospects. Meanwhile, Cheniere Energy experienced a sales boom in the second quarter as demand for natural gas in Europe continues to grow.
Major indices have attempted rallies, with the Dow Jones and S&P 500 testing weekly support on Friday. Given the market uncertainty, investors should be prepared for more daily breakouts and keep an eye on these stocks.
Cheniere Energy, Cardinal Health and VRTX stocks are all on the IBD leaderboard.
Cheniere Energy Stock
LNG shares rose 1.1% to 175.79 during Friday trading. For the week, the stock is up 3.1%, not from its highs, and rebounded from its 21-day and 10-week moving averages earlier in the week.
Cheniere Energy has been consolidating since mid-September but needs a week to set a proper base with a potential buy point formed on 10th August at 182.72.
Houston-based Cheniere Energy was IBD Stock Of The Day on Thursday as the largest US producer of liquefied natural gas sees strong demand in Europe.
Even as natural gas prices fall in the US and Europe, investors still see strong LNG demand for Cheniere and others.
The UK government confirmed last week that it was in talks with a number of companies, including Cheniere, for an LNG purchase deal.
In the first half of 2021, less than 40% of Cheniere’s LNG cargoes ended up in Europe. That rose to over 70% in the second quarter of this year, even as the company ramped up new export capacity. The urgency of Europe’s natural gas shortages has intensified over the past month. Back then, an explosion shut down the Nord Stream 1 pipeline from Russia, which once supplied 40% of the European Union’s natural gas.
In the second quarter, revenue rose 165% to $8 billion and LNG earned $2.90 per share versus a net loss of $1.30 per share in the second quarter of 2021. The company will report results for to announce the third quarter on November 3, with investors anticipating booming earnings for the next few quarters.
Cheniere Energy has a composite rating of 84. It has a relative strength rating of 98, an IBD exclusive Stock Checkup gauge of stock price movements with a score from 1 to 99. The rating shows how a stock’s performance has changed in the last 52 weeks compared to all other stocks in the IBD database. The EPS rating is 41.
VRTX stock rose 3.4% to 300 on Friday, rebounding from a test of its 50-day moving average. Shares rose 2.2% on the week. Vertex stock has formed a tight flat base with an official buy point of 306.05, according to MarketSmith analysis.
The stock has remained steady for the past few weeks while the relative strength line has trended up. The RS line depicts a stock’s performance relative to the S&P 500 Index.
Vertex Q3 results are due on October 27th. Analysts are expecting earnings per share to rise 1% to $3.61 per share and revenue to increase 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 targeting sickle cell disease, type 1 diabetes and certain genetic kidney diseases. This includes a gene editing partnership with Crispr therapeutics (CRSP).
In early August, Vertex reported better-than-expected second-quarter results and raised its full-year revenue guidance.
S&P 500 stock Vertex ranks second in the medical-biomed/biotech industry group. VRTX has a Composite Rating of 99. Its Relative Strength Rating is 94 and its EPS Rating is 99.
CRISPR Stocks: Will Risk Concerns Prevent Gene Editing Cures?
Cardinal Health Stock
CAH stock rose 3.2% on Friday to 73.03, overcoming a buy point of 71.22 from a flat cup and handle base and hitting a record high. But volume was small on the breakout. CAH stock is up 7.3% for the week.
The relative strength of Cardinal Health stock has also been trending higher for months.
The cup-and-handle base is part of a base-on-base pattern that forms directly over a cup base that was cleared on August 11th.
Based in Dublin, Ohio, Cardinal Health offers a wide range of healthcare services and supplies to hospitals, laboratories, pharmacies and long-term care facilities. The company reports that it supplies around 90% of hospitals and 60,000 pharmacies in the US
S&P 500 stock Cardinal Health will report earnings for the first quarter of 2023 on November 4. Analysts are expecting earnings to fall 26% to 96 cents a share. According to FactSet, revenue is expected to increase 10% to $48.3 billion.
Cardinal Health stock ranks first in the wholesale medicines, pharmaceuticals/supplies industry group 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.
Steel Dynamics warehouse
STLD shares soared 8.5% to 92.92 on Friday and 19% on the week after suffering an earnings win from Steel Dynamics on Wednesday night.
Shares rose above a consolidation buy point of 88.72 on Friday after breaking a trendline on Thursday. STLD stock is 17% above its 50-day moving average, which is definitely above this important moving average.
Steel Dynamics’ recent consolidation could be seen as part of a larger base going back six months.
Steel Dynamics beat earnings guidance for the third quarter with earnings per share rising 10% to $5.46 while revenue rose 11% to $5.65 billion. The steelmaker’s outlook is optimistic despite weaker flat steel prices. STLD reports its order activity and backlogs remain solid.
Based in Fort Wayne, Indiana, the company is one of the largest manufacturers of carbon steel products in the United States. In addition to steel production, it is also active in metal recycling and manufactures countless steel products.
How Millett Steel grew Dynamics from a three-person company
STLD stock ranks first in the steelmaking industry group. STLD stock has a composite rating of 96 out of 99. It has a Relative Strength Rating of 90, an IBD Stock Checkup exclusive gauge of stock price movements which sits at 99. The rating shows how a stock has performed against all other stocks in the IBD database over the last 52 weeks. The EPS rating is 98.
original parts warehouse
GPC shares rose 2.8% to 162.35 on Friday after the company beat earnings estimates on Thursday with its Q3 results. For the week, GPC is up 5.1% as the stock held its 50-day moving average and is on a flat footing.
GPC has an official flat-base buy point of 165.09 after a 3-week rally, according to MarketSmith analysis.
The relative strength line for original parts stocks has recovered sharply to highs in recent months.
On Thursday, the Atlanta-based auto parts company raised its full-year forecast for growth in its auto and industrial sales.
Genuine Parts’ earnings per share rose 19% to $2.23 and revenue increased 18% to $5.675 billion in the third quarter. GPC’s full-year guidance now calls for earnings per share of $8.05-$8.15, up from $7.80-$7.95. The company now forecasts revenue growth of 15% to 16%, up from a previous 12% to 14%.
During the Covid pandemic, supply chain restrictions caused a major upheaval in the auto industry, sending new and used car prices to record highs. This has increased the likelihood that consumers will hold on to their existing vehicles longer, increasing mileage and driving demand for auto parts.
Colleagues car stocks O’Reilly Auto Parts (ORLY) and AutoZone (AZO) have also rallied near buy points amid the battered market. O’Reilly reports Oct. 26.
IBD ranks genuine parts first in the retail/wholesale auto parts industry group. GPC stock has a Composite rating of 96. Its Relative Strength rating is 94 and it has an EPS rating of 89.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
YOU MAY ALSO LIKE
What is CAN SLIM? If you want to find successful stocks, you should know better
Top funds are buying into the #1 industry leader just ahead of the 364% growth breakout
Trade with experts on IBD Live
Get an edge in the stock market with IBD Digital
market rally roars; 5 growth stocks near buy points