After going AWOL in May, Nvidia returned to lead this month's list of new buys by the best mutual funds. Meanwhile, top money managers have learned to love online education firm Stride, which has made this screen every month this year. Now, as Nvidia stock navigates a rough patch, Stride prepares for a new breakout.
In another sign of keeping good company, Stride joins household names like Netflix and Google-parent Alphabet on the IBD Breakout Stocks Index. Stride's industry peer, Adtalem Global Education, also earns a spot.
Earlier this month, EdTech Breakthrough named Stride the Remote Learning Solution Provider Of The Year.
With a 98 Composite Rating, Stride tops the honor roll of education stocks. Adtalem Global Education is just behind with a 97.
Despite recent pullbacks, Nvidia remains one of 24 "perfect" stocks with the highest-possible 99 Composite Rating.
See Who Joins Stride On The IBD Breakout Stocks Index
Stride Eyes 77% Growth
Based in Herndon, Va., Stride reaches learners in all 50 states and more than 100 countries. Beyond K-12 education and tutoring, the company provides a wide range of services including career learning, professional skills training, and talent development.
On April 23, Stride posted $520.8 million in revenue for its fiscal third quarter, ended March 31. That marked an 11% year-over-year gain and a third straight quarter of double-digit growth.
Earnings rose 23% to $1.60 per share. For its fiscal fourth quarter, analysts forecast a 27% EPS gain to $1.51 a share and a 77% gain for the full fiscal year to $5.27 per share.
Stride Preps Breakout As Nvidia Faces Test
After briefly notching an all-time high on June 20, Nvidia flashed three sharp declines in above-average volume. The artificial intelligence giant found support at and bounced off its 21-day exponential moving average on Tuesday, rising nearly 7%. It managed to post another small gain Wednesday after reversing higher after an early drop. Some analysts say the recent spat of selling is overdone.
As Nvidia faces gets examined, Stride continues to build a flat base as part of a base on base-on-base pattern. It slipped below its 21-day line on Tuesday, dropping 2% in below-average, but rising volume. Stride dipped again Wednesday, but came off the day's lows to close essentially flat.
Stride ended the session 6% below the 73.33 buy point.
Stride's relative strength line has come off its 52-week high as the base has formed. But the 50-day moving average continues to trend higher. A breakout would lift Stride to an all-time high.
Adtalem has also formed a new flat base that could launch the stock to a record high.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
