General Energy (GE) leads five stocks to watch next week as GE shares remain in a buy zone. toll brothers (TOL), stock reserve (BKNG), Textron (TXT) and spc trade (SPSC) are showing relative strength amid a weaker market.
X
The current uptrend of the market is under increasing pressure as indices break support levels. Investors are advised to reduce exposure by 40-60% and should look across sectors for the right plays until the indices regain their footing.
GE Stock
Industrial giant GE is showing strength as commercial aviation improves despite mounting concerns about the global recession. On January 24, GE reported its first quarterly results since spinning off its healthcare business, posting a healthy pace of earnings.
For the fourth quarter, adjusted earnings increased 51% to $1.24 per share, beating expectations of $1.15 per share. Sales growth accelerated over the past three quarters, rising to 7%, or $21.8 billion, and beating FactSet forecasts of $21.2 billion.
For fiscal 2023, GE projects high single-digit revenue growth and adjusted EPS in a range of $1.60 to $2 per share.
General Electric recently spun off GE HealthCare Technologies (GEHC), with the rest of GE, a once-expanding conglomerate planning to be a pure aerospace game by early 2024.
GE shares are in a buy range on a cup-handle basis after passing the buy point of 81.28 in late January. Buy ranges typically extend 5% beyond a buy point. However, the current handle is very small on the daily and weekly chart, so consolidating a bit more could prove beneficial.
GE stock’s relative strength line hit a 52-week high on Friday and the stock has an RS rating of 94, out of 99. The stock has a composite rating of 79 but only an EPS rating of 46.
GE shares are up nearly 28% year to date.
toll brothers
Luxury homebuilder Toll Brothers beat expectations for first-quarter earnings results on Wednesday, despite US home prices showing signs of slowing in January.
“Since the start of the calendar year, we have seen a marked increase in demand beyond the normal seasonality as buyer confidence appears to be improving,” Chief Executive Douglas Yearley said in a statement.
For the full year, Toll Brothers anticipates delivery of 8,000 to 9,000 units with selling prices ranging from $965,000 to $985,000.
TOL’s shares are trading on a handle-based rate with a buy point of 62.71. Stocks found support at their 10-week moving average and are now holding the 21-day exponential moving average. Investors could find an early entry opportunity by breaking the downtrend line at the bottom handle or hitting above 60.
TOL shares are rated 96 EPS out of the best 99 possible. The stocks’ relative strength line is at a 52-week high. The RS line, the blue line on the charts provided, which hits new highs before a stock breaks out is especially bullish.
It has an RS rating of 91 as it outperforms most of its stock peers. Toll Brothers has a composite rating of 95, which combines several technical indicators into one easy-to-read rating.
stock reserve
Online travel agency Booking Holdings beat quarterly expectations on Thursday night fueled by a surge in demand for travel. Kayak.com’s parent company Priceline.com and its flagship Booking.com reported a 36% increase in revenue to $4.05 billion for the quarter. Meanwhile, earnings rose 56% to $24.74 per share.
Booking posted a new record in January for monthly room night bookings, with vacationers booking earlier than during the pandemic. Meanwhile, the company said gross bookings for the fourth quarter rose 44% to $27.3 billion.
BKNG shares now have a small hold on their long standing with a buy point of 2,537.10. Stocks find support at the 21-day line and remain above the 10-day moving average.
BKNG shares top IBD’s leisure travel booking group, according to IBD’s stock control. The stock has an EPS rating of 74 and an RS rating of 91 as it outperformed other travel stocks that are having a little more trouble. Booking Holdings has a near-perfect composite score of 98.
BKNG shares are off to a good start in 2023 and are up more than 21% year to date.
Textron
New England-based Textron makes various civil and defense aircraft, along with armored vehicles, helicopters and automotive operating technology. In early December, Textron’s subsidiary Bell beat Boeing (BA) and Lockheed-Martin (LMT) for an $80 billion US Army contract to build a new fleet of attack helicopters. The Bell V-280 Valor helicopter will replace the Black Hawk utility helicopter.
Textron matched the FactSet earnings consensus for its fourth-quarter results on January 25, with earnings rising 13.8% to $1.07 per share. Revenue increased 9.4% to $3.64 billion, barely beating estimates of $3.62 billion.
By 2023, Textron expects revenue to grow 8.5% to $14 billion. Adjusted earnings are seen rising as much as 57% to range between $5 and $5.20 per share.
TXT stock has a buy point of 76.07 for its huge cup base with handle. Stocks are currently finding support at the 21-day line. A bounce might offer a slightly lower entry around 75.
Textron is rated at 78 EPS after posting positive earnings last year. TXT shares have a composite rating of 88 and an RS rating of 83.
SPS trade
Supply chain management software provider SPS Commerce was the IBD Stock Of The Day on Wednesday. On February 9, SPS Commerce reported better than expected fourth quarter results. The Minneapolis-based company’s adjusted earnings soared 37% year-over-year to 63 cents per share on revenue growth of 19% to $122 million. Analysts forecast earnings of 54 cents a share on $120.8 million in sales.
SPSC shares are trading in a buy zone on a cup basis after passing the buy point of 146.91 on February 10. Stocks are off post-breakout highs, but holding up well.
SPSC shares lead the Group of Companies Specialized in Computer Software according to the IBD Stock Checkup. It has a perfect 99 composite score and a near-perfect 98 EPS score after two quarters of accelerating earnings growth. The 91 RS rating on SPCS shares is near a 52-week high.
The shares are up almost 15.5% year to date.
You can follow Harrison Miller for more news and stock updates on Twitter. @IBD_Harrison.
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