What do the stocks of Google-parent Alphabet, Netflix and Eli Lilly have in common? They are all finds from today's IBD Screen Of The Day, a column that highlights top growth finds in the IBD Stock Screener. These stocks are near buy points or in a buy zone.
Today's screen, "Stocks That Funds Are Buying," finds companies with robust fundamentals and bullish charts in which mutual funds are bolstering their positions. IBD seeks stocks with increasing institutional and outperforming mutual fund ownership to help lift a stock's price on heavy demand. Today's screen identified 40 growth stocks.
Alphabet and Eli Lilly have another common bond. Alphabet is snatching a key executive from Eli Lilly. Anat Ashkenazi will become chief financial officer and senior vice president of Google and Alphabet effective July 31. She is currently executive vice president and CFO at Lilly. Google gained nearly 1% while Eli Lilly inched higher Wednesday.
Google Stock Near A Buy Point
An IBD 50 stock, Google is about 2% below a 178.77 buy point from a recently formed bullish three-weeks-tight pattern. These formations could be used to add to an existing position or as an aggressive initial entry. The buy point is also its all-time high reached on May 20.
Shares gapped up 10.2% in heavy volume after the internet search leader topped first-quarter profit and revenue expectations on April 25. Its cloud computing revenue grew 28% to $9.574 billion, topping estimates of $9.4 billion.
Google stock has eased from record highs and is finding support at its 21-day exponential moving average. Also on the IBD Big Cap 20, Google shares have gained around 25% year to date.
Mutual funds have added Google stock, with 7,344 funds owning shares in March, up from 7,240 in December and 7,134 in September. Fidelity Contrafund (FCNTX) is one of its best-known shareholders. The fund lightened up its ownership in the March quarter, but still held a significant 20 million shares of Google stock. In addition, MFS Growth Fund (MFEGX) owned 17.5 million shares in March.
Eli Lilly Stock Hits Record High
Eli Lilly is on track for a seven-day winning streak as it reached a record high on Wednesday. The IBD Leaderboard stock is getting extended as it tops the 5% buy zone of a double-bottom base with a 793.67 buy point. The drug stock gained 43% this year so far and outpaced Google stock's 25% increase.
Lilly stock jumped after the drugmaker reported better-than-expected first quarter adjusted earnings but lower sales than expected on April 30. The stock retook its 50-day moving average on the move. Shares broke out May 21 on positive news of a Phase 3 study on its Crohn's disease drug.
FactSet estimates show revised full-year 2024 earnings of $13.67 per share, more than double the $6.32 in 2023. FactSet projects $19.14 EPS in 2025.
Mutual funds ownership jumped to 5,160 funds owning the drug stock in March, up from 5,018 in December and 4,819 in September. It has an Accumulation/Distribution Rating of B, meaning institutions have been moderately buying the stock over the last 13 weeks.
Netflix Stock Rebounds Into Buy Zone
On Wednesday, Netflix stock bounced back into the buy zone of a fourth-stage cup base with a 639 buy point, according to MarketSurge pattern recognition. The buy range reaches to 670.95. Shares broke solidly out of the base on May 21, and wavered around the buy zone before dipping and finding support at its 21-day exponential moving average.
Netflix stock plunged more than 9% in heavy volume on April 19, after the company topped first-quarter profit and sales estimates but disappointed with its second-quarter revenue outlook. The streaming entertainment player fell below its 50-day line. Shares climbed seven straight days from the bottom of the cup base and reclaimed the line in early May.
FactSet estimates show hefty full-year 2024 earnings growth of 55%, then 21% in 2025.
Mutual funds own 50% of shares. In March, 3,923 mutual funds owned Netflix stock, up from 3,810 in December and 3,661 in September. It also has an Accumulation/Distribution Rating of B.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
