The stock market gained steam on Friday after Federal Reserve Chairman Jerome Powell set the stage for a series of rate cuts this fall and warned that "downside risks to employment have increased." Magnificent Seven member Meta Platforms leads this week's list of stocks to watch near buy points.
Swiss shoemaker On Holding is trading in a buy zone, as well as healthy pet food producer Freshpet. Insmed stock and Shift4 Payments are right around buy points.
Meta Stock
IBD added Meta stock as a full position on SwingTrader on Aug. 21.
Meta stock is trading just below a 542.81 buy point. Shares initially topped the buy point on Thursday before settling below the entry.
The buy zone for the pattern, which stretches 5% beyond the buy point, extends to 569.95.
META stock has rallied 49% so far this year.
The Facebook and Instagram parent company at the beginning of the month cleared Q2 estimates with a 73% increase in earnings on 22% revenue growth. Advertising revenue growth also outpaced forecasts.
Meanwhile, Meta has pivoted from the metaverse to focus on its artificial intelligence ambitions. CEO Mark Zuckerberg expects capital expenditures to range from $37 billion to $40 billion this year, with "significant capital expenditures growth" for 2025 as it builds out its advanced data center capacity. Long-term, Zuckerberg predicts Meta will offer fully-automated advertising plans to clients.
On Holding Stock
On Holding stock surged last week as the Swiss shoemaker continues to gain steam following its Aug. 13 earnings report. ONON was the IBD Stock Of The Day for Wednesday and is a member of the IBD 50 list.
On posted adjusted earnings of 16 cents per share, just short of FactSet views for 19 cents. Revenue leapt 29% to a record $653.8 million, ending a string of five quarters of decelerating sales growth.
On Holding maintained its full-year forecast for at least 30% net sales growth on a constant currency basis. That implies net sales of at least 2.26 billion Swiss Francs, about $2.65 billion. The revenue outlook was just shy of FactSet estimates for $2.66 billion.
The company expects a gross profit margin of around 60% for 2024 with an adjusted EBITDA margin of 16% to 16.5%.
Multiple analysts lifted their price target on shares following results, touting On's "industry-leading" revenue growth and its "innovation-led culture."
ONON stock is trading in a buy zone, just above a 43.20 handle buy point. The handle began with the Aug. 13 intraday high following earnings. Shares broke out on Aug. 21. On Friday, shares closed above the top of the consolidation, hitting their best levels since late 2021.
On stock has rocketed 65% in 2024.
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Freshpet Stock
Pet food specialist Freshpet has rallied 60% this year and is trading at its highest level since November 2021.
Shares broke out Friday, clearing a 136.36 buy point in heavy volume after testing the 50-day line earlier in the week.
Freshpet reported earnings on Aug. 5. Shares initially plunged that day amid the global market sell-off, but closed nearly flat. FRPT stock reclaimed the 50-day moving average the following day.
IBD spotlights Freshpet this week in The New America.
The Bedminster, N.J.-based producer of steam-cooked, grain-free meals for pets recorded strong earnings growth over the last five quarters, while revenue growth ranged from 26% to 34% during that period.
Freshpet is a member of the IBD 50 list and leads the Food-Packaged Group, according to IBD Stock Checkup.
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Insmed Stock
Insmed has soared 154% in 2024 to 23-year highs after the biotech in May cleared a major hurdle for its experimental lung disease treatment.
On May 28, Insmed succeeded in a final-phase study for its drug brensocatib, a treatment for non-cystic fibrosis bronchiectasis. The chronic inflammatory lung disease permanently widens airways, which can lead to respiratory infections, chronic cough and excessive sputum production.
Currently, there are no medications specifically approved to treat bronchiectasis. Analysts estimate the market potential for brensocatib could exceed $20 billion, when comparing it to other treatments for immunological diseases.
Insmed plans to submit a New Drug Application (NDA) with the U.S. Food and Drug Administration in the fourth quarter. Shares spiked nearly 119% for the day after the news release.
INSM stock is trading right around a 78.87 buy point for a flat base, closing just above the entry on Thursday before settling at 78.84 on Friday.
Insmed's relative strength line is at 52-week highs with a perfect 99 RS Rating.
Shift4 Payments Stock
Shift4 Payments is working toward an 83.64 buy point for a cup-with-handle base.
Shares on Friday bounced above Thursday's high of 80.38, which could offer an early entry for aggressive investors.
The depth for the current pattern is 39%, which is fairly deep. Most cup bases typically range from 15% to 33% depth.
On the plus side, Shift4 rebounded strongly in heavy volume after Aug. 5, bucking the trend of stocks rallying in lighter trade.
FOUR stock is up a little more than 9% so far this year.
Shift4 on Aug. 8 reported a 30% increase in adjusted earnings and revenue for its Q2 results. The Allentown, Pa.-based digital payments processor averaged 46% earnings growth over the last four quarters on average 28.25% sales growth for the period. Analysts expect 2024 earnings will increase 33%, followed by 29% growth in 2025.
Shift4 Payments is a member of the IBD Sector Leaders list.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
