After gapping up to a nearly 38% gain in a single day on earnings last month, Medpace continues to test a new buy point. The provider of clinical research-based drug and medical device development services has landed a spot on the IBD 50 and IBD Leaderboard.
Medpace also earns placement on the latest list of new buys by the best mutual funds. Plus, 27 funds with an "A+" rating from IBD own shares in the company, which has grown from its founding in 1992 to over 4,800 employees across 41 countries.
With a 96 Composite Rating, MEDP stock scores top billing among its peers in the Medical-Research Equipment/Services group. Boosted by a 0% debt-to-equity ratio, the company has an "A" SMR Rating in Stock Checkup, which tracks sales growth, profit margins and return on equity.
Q3 earnings rose 59%, with revenue up 30% to $383.7 million. Analysts see 35% EPS growth in Q4.
Over the last three years, Medpace has generated average annual EPS gains of 32%. Wall Street forecasts 45% earnings growth for the full year.
Medpace Tests New Breakout
In a sign of sustained strength, MEDP stock has held the bulk of its gains from last month's massive gap-up. Volume on the Oct. 24 surge was a powerful 703% above average.
As you like to see after such a jump, trading has tightened up as investors digest those gains, hopefully in preparation for a continued rise. The relative strength line continues to hold right around its 52-week high.
Medpace is now moving back up to the 231.10 buy point it briefly cleared on Oct. 26. The stock fell more than 8% below the entry, which was a sell signal. But the constructive action lately resembles a handle formation. So, 235.82 could be viewed as another buy point.
The 50-day moving average has perked up again but has a long way to go to catch up with the actual stock price action.
As Medpace approaches the 231.10 entry, look for volume to come in at least 40% higher than normal on any breakout attempt to confirm demand for the move.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
