For today's IBD Screen of the Day, we check the Stocks That Funds Are Buying list from the IBD Stock Screener. It shows mutual funds piling into Big Techs and retailers.
Apple is a growth stock that funds keep buying, giving the stock a top notch Accumulation/Distribution Rating of A-.
Apple stock has a Composite Rating of 91 and an RS Rating of 89. The EPS Rating of 80 reflects a softening profit picture, including an expected 2% decline in EPS for the fiscal year ending in September.
Shares are extended from a handle entry of 157.38, according to IBD MarketSmith chart analysis. The stock is meeting resistance around 180. A new base is on watch as the stock holds solidly above the 50-day moving average.
Sales declined 3% in the fiscal second quarter to $94.8 billion while earnings per share of $1.52 were flat from the previous year. The Cupertino, Calif., giant just completed its Worldwide Developers Conference, where it revealed a mixed reality headset and several hardware and software upgrades for other products.
Microsoft is still in buy range from a three-weeks-tight entry of 313. However, shares are pulling back in light volume Wednesday right as the stock tests its all-time highs around 340. So watch for a deeper pullback.
A B+ Accumulation/Distribution Rating also shows strong fund manager interest for the software and cloud stock. The Composite Rating of 97 is sound, while the Relative Strength Rating of 93 is good still. The growth stock also sports a strong EPS Rating of 90.
Fiscal third-quarter results showed revenue grew 7% to $52.9 billion and earnings per share of $2.45 were up 10%. Mutual funds own 41% of shares outstanding. More funds have been buying MSFT over the past eight quarters, MarketSmith data shows.
Walmart Looks Firmer Than Apple Stock
Walmart is in a better chart situation than Apple and Microsoft. Walmart stock is in a buy zone from a 148.34 entry and has an Accumulation/Distribution Rating of B-. Shares are finding support at the 50-day line and may form a new base.
It has a Composite Rating of 85 and EPS Rating of 88. The Relative Strength Rating is 81.
Sales of $152.3 billion were up 8% in the April quarter while earnings per share of $1.47 grew 13%. The Bentonville, Ark.-based retailer runs around 10,500 stores and clubs under 46 banners in 24 countries and e-commerce websites. For the full year, the Dow Jones leader expects sales growth of 3% with an earnings per share increase of 5% to 6%.
Gartner offers a handle entry at 349.10.
The growth stock has steady sales growth, ranging from 12% to 17% over the past eight quarters, while earnings growth has slowed. From a 123% EPS jump in Q3 of 2021, earnings slowed to 24% the past two quarters.
Mutual funds own 57% of shares outstanding. In the first quarter, Gartner saw sales of $1.41 billion — a 12% increase. Earnings per share of $2.88 showed 24% growth as well. The company provides research and analysis on technology markets.
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