With the market officially in bear territory, the majority of stocks are suffering. Nevertheless, there are still some names that are holding up well and outperforming.
By scanning for stocks with a relative strength line at new highs in the IBD Stock Screener, we can look for these outperformers, which are trading with strength despite market weakness. Here are some of the stocks to watch that could be leaders when the broad market improves.
Verra Mobility Outperforms Despite Sector Weakness
IBD's Specialty Enterprise Software group has been one of the market's weakest areas, currently ranking 182nd out of 197 industries. However, the top-ranked stock in the group, Verra Mobility,ticker symb=VRRM], is an exception as shares trade with a relative strength line near highs. The stock is forming a cup-with-handle base with a 16.83 buy point.
Verra Mobility develops and provides data intelligence to help make transportation easier and safer. Despite sector weakness, Verra Mobility has a solid IBD Composite Rating of 94. And the company has experienced strong growth.
Highlighted last week in the Breakout Stocks column, Verra Mobility displayed sales growth over the last four quarters of 61% to 90%. Earnings have also been growing rapidly. Analysts expect this growth to continue into the company's next quarterly results, with an estimated 150% EPS growth.
Monster Energizes Investors As Defensive Play
Defensive stocks have been outperforming as investors seek shelter from more volatile growth names. This has helped shares of Monster Beverage, which are trading with a relative strength line at new highs. The stock is forming a base with a 98.83 buy point. Shares rose more than 3% Tuesday.
Monster Beverage has also been outperforming its peers, ranking first in IBD's nonalcoholic beverage group while boasting a strong Composite Rating of 96.
The company expects some moderate growth ahead, with analysts projecting EPS to increase from $2.57 last year to $2.70 and $3.20 in 2022 and 2023, respectively. Analysts are growing more fond of the stock. BMO Capital raised its price target on Monster last week to 95 from 90.
Neurocrine Biosciences Another Stock To Watch
Shares of Neurocrine Biosciences have been trading sharply higher, now around 94, after hitting a 75.25 low in early May. The stock is trading with a relative strength line at new highs as shares form a cup with handle that's part of a larger pattern. The buy point is 98.84.
Despite earnings falling over the last two quarters, analysts still expect earnings growth of 18% for the full year and 52% next year.
