Investors looking for stocks to buy and watch should check out the IBD Screen Of The Day, a column that focuses on a list of top ideas in the IBD Stock Screener.
Today we look at the Stocks With Rising Profit Estimates screen (which means analysts are raising their profit estimates on these leading companies). The list features footwear leader Crocs, Perion Networks and Sanmina.
Stocks To Watch: Crocs
Crocs stock is forming a short base that has a 83.74 buy point. Shares rallied more than 2% midday Wednesday. Bullishly, the stock's relative strength line is at its highest level since February, according to IBD MarketSmith chart analysis. Keep in mind that the stock market correction means investors should avoid stock buys until the market improves.
In the most recent quarter, Crocs earned $3.24 per share on sales of $964.6 million, representing year-over-year increases of 45% and 51%, respectively. Amid strong fundamentals and big price gains in recent weeks, CROX stock boasts a strong 97 out of 99 IBD Composite Rating, according to the IBD Stock Checkup.
One flaw: an excess of overhead supply of disgruntled CROX holders who bought at higher prices and are waiting for an opportunity to unload their shares to break even or accept a small loss.
Meanwhile, another footwear leader — Deckers Outdoor — was the IBD Stock Of The Day Tuesday. Deckers shares are above their 50-day line but need a bit more time to forge a proper base.
Footwear stocks tend to be somewhat recession-resistant. People buy shoes, especially lower-price ones, during hard times and good times.
Software Stocks To Watch: Perion
Among other stocks to watch, software leader Perion Networks is moving up the right side of a new base following last week's decisive retake of the 50- and 200-day lines. Shares climbed nearly 2% midday Wednesday. A buy point is not clear so far.
The stock's relative strength line is closing in on new highs this week, which would confirm the Israeli software developer as a market leader. Earnings are due out Nov. 9. Earnings and sales are expected to grow 22% and 30%, respectively, vs. the year-ago period.
PERI stock has a 96 EPS Rating and an 88 IBD Composite Rating.
Sanmina Eyes New Buy Point
Contract manufacturer Sanmina continues to rebound after triggering the round-trip sell rule from a 45.77 cup-base entry in September. Now the stock is forming another cup base, this time with a 52.24 buy point. Keep an eye out for a potential handle to offer a lower entry. Sanmina shares fell nearly 1% Wednesday.
Sanmina boasts a relative strength line at new highs, which is a reason to put this top stock on your watchlist. Wait for a decisive breakout to coincide with a new market uptrend before purchasing shares.
