deere (DE) and dexcom (DXCM), which has a small new glucose monitoring system, tops this weekend’s watch list of 5 stocks near buy points. All stocks have selling momentum that is expected to continue, despite some economic uncertainty. vertiv (VRT), which supplies data centers with power and thermal management products, a leader in digital sign verification double check (DV) and supplier of French fries to McDonald’s Weston Lamb (LW) complete the list.
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The 5 stocks on the watch list have recently been featured as IBD stocks of the day. Deere stocks are part of the flagship IBD 50 list of leading stocks.
deere
On Friday, Deere released fiscal first quarter results highlighted by EPS growth of 124% and a second consecutive quarter of revenue growth of more than 30%. Deere pushed the 2023 net income guidance to a range of $8.75 billion to $9.25 billion from $8 billion to $8.5 billion.
Sales of Deere’s precision farming and production equipment should increase 20% this year, driven by price increases of 14%. Construction and forestry equipment sales are expected to grow 10-15%, thanks in large part to price increases of 9%.
With demand seen to exceed industry capacity, dealer inventories are expected to remain low, reducing risk to the outlook.
Deere shares rose 7.5% to 433.31 on Friday, rising back above their 50-day moving average.
After November’s attempted breakout of a 7-month consolidation, Deere shares have recorded a flat bottom for the past 11 weeks. The buy point is 448.50. However, Friday’s compelling move beyond its 50-day line offers aggressive early entry.
dexcom
Dexcom just launched the US availability of its G7 continuous glucose monitoring system for patients with diabetes on Friday. The small patch that can be worn on the back of the arm and send data to an app is 60% smaller than its previous version.
The company said Monday that the device has been approved for Medicare coverage. The European launch last fall is off to a good start. Dexcom says it is converting users from other body-worn devices, as well as adding patients who previously relied on finger pricks and test strips.
Dexcom already released fourth-quarter results on February 9, beating estimates and removing short-term risk. Dexcom earned 34 cents per share, down from a loss of one cent a year earlier.
DXCM shares rose above their 50-day moving average on February 10 on the gains. A daily chart shows that it has pulled back on soft volume. DXCM shares could end up recording a handle with a buy point of 121.21 after Tuesday. However, the mango is already complete on the weekly chart, with the same buy point.
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vertiv
Vertiv, headquartered in Columbus, Ohio, with 24,000 employees and operations in more than 130 countries, will report fourth-quarter earnings early Wednesday. After a decline in profits in late 2021 and the first half of 2022, Vertiv has rebounded in a big way. EPS is expected to rise 675% to 31 cents with revenue growth of 19% to $1.68 billion.
In its third-quarter report, Vertiv said its order book had risen to $4.7 billion, up 46% from the end of 2021.
Vertiv offers complete power and cooling systems, along with monitoring and services. Being a one-stop shop, coupled with its breadth of operations, gives it an edge over the competition.
VRT shares rose 0.2% to 16.06 on Friday. VRT shares are a hair below a buy point of 16.17, 10 cents above their November 10 high.
VRT’s Relative Strength Line, the blue line on IBD charts that tracks its progress against the S&P 500, is also on the cusp of a 52-week high after collapsing on fourth-quarter gains a year ago.
double check
DoubleVerify measures ad views and consumer engagement so businesses can know if they’re getting enough value for their ad spend. The company also provides ancillary services, such as ensuring ads are placed in brand-friendly environments, a big problem for social media these days.
The company’s main sales channels have been metaplatforms (META) Facebook and Instagram, as well as Alphabet‘s (GOOGL) YouTube, but is expanding to serve advertisers on TikTok, LinkedIn, Reddit, and Twitch.
DoubleVerify also has a new partnership with Netflix, which launched an ad-supported service in November.
“We expect transaction volumes to remain the main driver of growth in the near term, driven by customer acquisition, international expansion and channel expansion, especially in social media, internet TV and retail media. “Truist Securities analyst Youssef Squali said in a recent note to clients. .
DoubleVerify earnings are due on March 1st. One strategy to reduce risk around earnings is to use call options.
DV shares fell 1.1% to 27.38 on Friday but remained above its 21-day line. It is running on a mug base with a handle, with a point of purchase of 28.99.
Weston Lamb
Lamb Weston, the Eagle, Idaho, frozen potato and potato chip giant, retails and private label products worldwide. mcdonald’s (MCD), its main customer, accounted for 10% of sales in fiscal 2022.
Lamb Weston’s fiscal second-quarter earnings report in early January was a revelation. Sales growth accelerated to 27% as the company massively raised full-year guidance to a range of $3.75 to $4 per share from $2.45 to $2.85.
The company said pricing actions to offset higher costs for potatoes and other inputs will boost results. However, strong food service activity could be an advantage. Restaurant and bar sales rose 25.2% from a year earlier in January, the Commerce Department said.
Since rising with the updated guidance on Jan. 5, LW shares have been carving out a flat bottom with a buy point of 100.87. LW shares rose 0.5% to 100.48 on Friday.
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