Meta Platforms and JPMorgan Chase lead this weekend's watch list of five stocks near buy points as the S&P 500 enters the second half of 2024 in stride, up 14.5% year-to-date and within a half-percent of an all-time high. Joining Meta and JPM are enterprise software company Monday.com, work supplies and uniform provider Cintas and off-price apparel retailer Burlington Stores.
Meta is part of the IBD Leaderboard portfolio of elite stocks. SwingTrader, which aims to capitalize on short-term trends to rack up a bunch of singles and doubles, also has a Meta position. MNDY is part of the flagship IBD 50 list of leading growth stocks. Cintas is on the watch list for the IBD Long-Term Leaders list of stocks with the track record that makes them actionable on constructive pullbacks.
Meta Stock
After its dramatic recovery back to the trillion-dollar club and joining the Magnificent Seven, Meta has been consolidating since early April, but has set up for a potential move higher. The recent breather has come as investors weighed Meta's dominance of the social media ad space against expectations of moderating revenue growth vs. tough year-ago comparisons and hefty AI-related spending.
But some analysts are finding more reason to be bullish. On June 20, KeyBanc hiked its price target for Meta stock to 540 from 475, keeping an outperform rating. The analysts cited rising Meta ad prices in Q2 that should put quarterly revenue near the top end of guidance. On June 12, Citi stood buy Meta as a top pick. The analysts noted that an increasing percentage of Reels short-term videos now display ads, which is among the reasons they believe Meta's share of ad spending is growing.
Meta edged into a buy zone on Thursday, before slipping 3% to 504.22 on Friday as stocks reversed lower. Still, Meta is within 2% of a 514.01 buy point from a cup-with-handle, according to a MarketSurge analysis.
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JPMorgan Stock
After this week's news that it had passed the Federal Reserve's stress test with plenty of excess tier 1 capital to spare, JPMorgan announced late Friday that it was boosting its quarterly dividend to $1.25 from $1.15. On top of that, the board authorized a $30 billion buyback of JPM stock.
The expanded buyback follows CEO Jamie Dimon's comment at the May 20 investor that JPMorgan is "not going to buy back a lot of stock at these prices." At the investor day, the company raised its outlook for 2024 net interest income to $91 billion from $90 billion.
Net interest margins tend to benefit when the Treasury yield curve steepens, or becomes less inverted, as longer-term yields rise more than short-term yields. That happened on Friday, as the 10-year Treasury yield surprisingly moved higher, despite the tamest inflation report since late 2020. Markets were apparently reacting to former President Donald Trump's convincing debate win over President Biden.
Strategists see financial stocks as among the likely beneficiaries of a second Trump term.
JPM stock rose 1.55% to 202.26 in Friday stock market action. Friday's move lifted JPM past an early entry point, making it actionable now. The buy signal flashed as JPM stock moved convincingly above its 50-day and 21-day averages, while breaking a trendline sloping down from its May 20 high.
JPM has an official flat-base buy point of 205.88.
Monday.com Stock
Monday.com, a 2021 IPO, continues to grow beyond its roots providing project-management software to small businesses. Featured as IBD Stock Of The Day on May 28, the firm's cloud-based solutions now include customer relationship management and product development.
Revenue grew 34% to $216.9 million in fiscal Q1, while larger accounts with at least $50,000 in annual recurring revenue grew about 50%, William Blair analyst Arjun Bhatia wrote in a May 15 note.
MNDY stock gapped up to a 21.4% gain on Q1 results, as it boosted full-year revenue guidance by $16 million due to a better-than-expected reception to its price hike and healthy demand, Bhatia noted, though he characterized the outlook as conservative.
Monday.com saw record adoption of its newer products and has another launch of IT service and support software coming later this year.
The company's net retention rate was 110%, and William Blair sees that rising as it cross-sells products and its price increase gradually rolls out to customers with yearlong contracts.
Last week, as software stocks outperformed, MNDY stock jumped 7% to 240.76, rebounding from the 10-week line. On Thursday, shares cleared a downtrend in a short consolidation that's fractionally too deep to be a flat base. It looks like a condensed double-bottom base with a 239.54 buy point. On Friday, shares cleared that entry, which roughly coincides with a 239.22 buy point from a prior base.
On Friday, as software stocks continued their recent outperformance, MNDY stock rose 1.9% to 240.76. That capped a 7% weekly gain, rebounding from the 10-week line.
MNDY stock has an excellent 97 IBD Composite Rating based on a range of technical and fundamental factors, according to IBD Stock Checkup.
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Cintas Stock
Cintas reported fiscal Q3 results on March 27 that showed sales rising 10% to $2.41 billion, including 7.7% organic revenue growth. Earnings growth accelerated for the second quarter in a row, increasing 22% to $3.84 per share.
Gross margin as a percentage of revenue rose to 49.4% from 47.2% the year prior, as ongoing efficiency efforts bore fruit.
Cintas is seeing strong double-digit percentage growth in its First-Aid and Fire business, with plenty of runway, RBC Capital said in a research note after the Q3 report. RBC raised its price target to 725 from 675, keeping an outperform rating.
The reporting date for fiscal Q4 results has yet to be announced, but it fell on July 13 last year.
CTAS lost 1.6% to 700.26 on Friday, slipping below a 704.84 buy point from a flat base stretching back to late March. CTAS found support at its 21-day exponential average.
Cintas announced a 4-for-1 stock split on May 2 that will take effect in September.
Burlington Stores Stock
Burlington Stores was IBD Stock Of The Day on June 14, with the off-price apparel retailer setting up for a new entry after BURL stock surged 17.6% on May 30 on its beat-and-raise Q1 results and guidance. That entry came on June 20, as BURL broke the trendline sloping down from what might be considered a high handle formation.
Since then, BURL has drifted higher within the buy zone from the prior cup base, which had a 232.69 buy point.
Following the Q1 report, Evercore ISI raised its BURL price target to 274 from 270, keeping an outperform rating. The research firm cited Burlington's 10.5% sales growth as encouraging, but analysts were even more excited about progress on margins.
On the earnings call, Burlington CFO Kristin Wolfe gave an update on supply-chain initiatives to "streamline operations, reduce touches, reduce time to process merchandise, and ultimately save labor dollars" in distribution centers. "In the first quarter, we found we are harvesting these savings a bit faster than we'd originally expected."
Thanks partly to these efforts, Burlington is targeting a margin expansion of 400 basis points over five years, relative to a 6% baseline in 2023. BURL has a 97 IBD Composite rating out of a possible 99.
Be sure to read IBD's The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.
