One easy way to find top-notch growth stocks is to use the IBD Stock Screener. Wednesday's "Relative Strength At New High" screen finds stocks meeting stringent IBD criteria with their relative strength lines making new highs.
The relative strength line measures the price performance of a stock compared with the S&P 500. An uptrending line means the stock is outperforming the S&P 500, while a downtrending line means it lags the S&P 500.
Of the 24 stocks selected in today's stock screen, we highlight three that have constructive charts. But remember the stock market is still in a correction, which makes new buys risky.
Stock Screener Finds Stock In Bullish Pattern
Comfort Systems stock formed a bullish three-weeks-tight pattern with a 182.94 buy point, according to MarketSmith pattern recognition.
Comfort reported higher-than-expected second-quarter earnings and sales on July 26 after the market close.
The stock popped 5.1% on July 28, after UBS raised its price target to 174 from 162 and maintained its neutral rating. Comfort's stock climbed to a 52-week high on Aug. 8.
Quarterly earnings grew a hearty 65% on 27% sales growth. Analysts forecast 42% full-year EPS growth this year and 12% next year.
Mutual funds own a high 69% of shares, with 643 owning the industrial stock in June, up from 616 in March and 573 in December.
Comfort Systems holds the No. 1 spot out of 11 stocks in the building-A/C & heating products industry group. The group is ranked an elite No. 9 out of the 197 IBD industry groups.
The company is a building and service provider for mechanical, electrical and plumbing building systems.
Quanta Hits A 52-Week High
IBD 50 infrastructure stock Quanta Services hit a 52-week high on Wednesday. Shares traded tightly in light volume and formed a variation of the three-weeks-tight pattern called a 4-weeks-tight pattern with a 206.43 buy point.
Shares tested and found support at the 10-week moving average.
Quanta reported lower-than-expected second-quarter profit and higher sales on Aug. 3. Quarterly earnings grew a modest 7% on 19% sales growth. Analysts expect 13% profit growth this year and 15% in 2024.
Mutual funds have increased their positions in the stock, with 1,923 owning shares in June, up from 1,856 in March and 1,806 in December.
Quanta Services ranks No. 2 out of 20 stocks in the building-heavy construction industry group. The group ranks a high No. 17 out of the 197 IBD industry groups.
Quanta provides engineering and construction services to the electric power, renewable energy, oil and gas, and communication industries.
Stock Screener Finds Biotech Stock Hitting Buy Point
Disc Medicine shares are in the 5% buy zone after hitting the 55.51 buy point of a cup-with-handle base on Wednesday.
The stock's RS line hit a new 52-week high as it neared the buy point, as shown by the blue dot on the MarketSmith charts. Shares gained an impressive 181% this year so far. That performance earned the stock a best-possible 99 IBD Relative Strength Rating.
Disc Medicine hasn't produced any revenue yet but has treatments in its pipeline. Disc specializes in developing treatments for rare blood disorders.
The biotech company reported a smaller-than-expected loss on Aug. 11. The encouraging results prompted Wedbush to raise its price target to 79 from 58 and hold its outperform rating. Meanwhile, H.C. Wainwright raised its target to 70 from 66 with a buy rating.
Mutual funds are discovering this gem of a stock, as 115 owned shares in June, up from only 39 in March. IBD Mutual Fund Index component T. Rowe Price New Horizons (PRNHX) fund bought 100,000 shares in the second quarter.
Follow Kimberley Koenig for more stock market news on Twitter @IBD_KKoenig.
