Goodbye Apple. Hello Eli Lilly, Vertex Pharmaceuticals and Albemarle. As AAPL stock drops off the latest list of new buys by the best mutual funds, top money managers bet big, with a focus on the medical, energy and retail sectors.
Eyeing a broad range of industries as the market indexes look to trigger a new uptrend, the best mutual funds invested at least $1 billion in each of 24 stocks.
Regeneron Pharmaceuticals, Merck, McKesson and managed care providers Humana and Cigna also join Lilly and Vertex in the billion-dollar club from the medical sector.
Drugmaker Lilly topped this stock screen, raking in an estimated $44.8 billion. While landing a spot among the top five biotechs, Vertex comes in a distant second among medical stocks, garnering roughly $12.4 billion.
Among oil and gas stocks and other energy names, the best-performing funds also pumped large sums into Enphase Energy and Warren Buffett favorite Occidental Petroleum
The best mutual funds also opened up their wallets to buy shares in retail sector stocks O'Reilly Automotive, BJ's Wholesale Club, Ulta Beauty and Academy Sports & Outdoors.
Top money managers invested around $19 billion in ALB stock. Meanwhile, fellow chemicals industry peer CSW Industrials also took a spot on this list of new buys by the best mutual funds.
Note: Be sure to check these Excel files, updated and published each month, to see all the stocks on the latest list of new buys by the best mutual funds.
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Best Mutual Funds Push Vertex, Lilly And More Toward Buy Points
As the indexes struggle to firmly establish and build on a market bottom, a wide range of stocks on this list of new buys by the best mutual funds are in or near new buy zones. But several of those entries are getting tested.
ALB stock, a lithium play just featured in The New America, keeps trying to hold on to a recent enphbuy zone. Meanwhile, Vertex, Lilly, ORLY stock and many more try to clear fresh buy points in a still-challenging market.
While reviewing the stock charts for the companies in demand among the best mutual funds, keep a close eye on the relative strength line and key moving averages.
VRTX stock is approaching a 306.05 buy point in an early stage flat base. Note how its RS line has already hit a new high. Lilly's relative strength line is just shy of hitting that mark as the drugmaker gears up for a potential breakout past a 335.43 entry. A rising relative strength line means that stock's price performance is outpacing that of the S&P 500.
Track Support And Resistance At Key Moving Averages
Seeing if stocks find support or hit resistance around moving averages like the 50-day and 10-week lines is also critical. At the same time, checking the volume at those benchmarks is also critical. ENPH stock has just provided a good example.
The IBD Big Cap 20 stock crashed below its 50-day line earlier this week in huge volume. As a result of that move, Enphase dropped off IBD Sector Leaders. At the same time, look at the stock chart to see how its relative strength line nose-dived.
The recent decline does not necessarily mean the run is over the for this highly profitable and fast-growing solar stock. But investors will want to see the RS line trend higher and ENPH stock get back above the 50-day and 10-week lines to prove the sun is still brightly shining on it.
Also watch ASO, BJ, ULTA and others that are testing their 10-week line. Having fallen below its 10-week benchmark, Ulta Beauty is now trying to hold on to its second line of defense, the 40-week line.
AAPL stock was not among the new buys by top money managers this month. But the iPhone maker does show the importance of tracking support and resistance at its moving averages. As tech stocks have struggled this year, Apple has also found it difficult to hold that line. AAPL stock currently trades below both its 10-week and 40-week lines.
As you go through this screen of new buys by the best mutual funds, also be sure to check out all IBD Stock Lists to enhance and expand your stock picks and stock research. Click here each day to see which stocks just came on or off these lists.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
