Top IBD-rated stocks Brown & Brown, which is an S&P 500 component, and GATX, an S&P Midcap 400 stock, surged Tuesday after reporting better-than-expected Q4 earnings.
GATX rocketed 11% higher while S&P 500 stock BRO spiked more than 6% in opening trade on Tuesday. GATX pared gains to trade up 5.9% at 124.60. BRO whittled its advance to 4.7%, trading at 78.88.
Brown & Brown broke out above a 76.25 buy point from a flat-base pattern, according to MarketSmith analysis. Meanwhile, GATX has formed a cup-with-handle base with a 121.68 entry.
Notably, both moves presented breakaway gaps. This is when a stock blows past a buy point and opens well above that entry or even above the 5% buy zone for the base pattern.
IBD's long-standing advance for investors is not to chase stocks when they become extended above buy points. But a breakaway gap is a move powerful enough to adjust the base's buy point. Rather than the typical handle of a flat-base buy point, the entry on the breakaway gap is at the price where the stock begins trading for the day. The goal is to buy as close to that level as possible.
For GATX, that buy point on Tuesday was 126.40. For BRO, it was 78.14.
Market Holds Gains; Netflix Jumps With ServiceNow, Tesla Due
S&P 400 GATX, S&P 500 BRO Earnings
On Monday, Brown & Brown, an insurance agency, reported Q4 earning of 58 cents per share, up 16%, with revenue growing 14% to $1.03 billion. Analysts had projected EPS of 53 cents and sales of $987 million.
Chief Executive J. Powell Brown said in the earnings release that he was pleased to hit more than $4 billion in revenue for 2023 and that the company now looks to its "next goal of $8 billion."
Brown shares have rallied 50% off a March low.
Meanwhile, GATX, the Chicago-based lessor of railcars, freight containers and aircraft spare engine parts, early Tuesday revealed better-than-expected Q4 earnings and revenue. GATX's earnings per share grew 13% while sales increased 14% as the company "capitalized on the favorable market conditions by successfully increasing renewal lease rates while extending lease terms."
The company also gave initial EPS guidance for 2024 of $7.30–$7.70. Wall Street forecasts GATX earnings per share in 2024 to be $7.02.
Brown & Brown stock has a 94 Composite Rating out of 99. The S&P 500 stock also has a 76 Relative Strength Rating, an exclusive gauge for share-price movement, and a 98 EPS Rating. GATX has an 89 Composite Rating, a 56 Relative Strength Rating and a 92 EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Is Tesla Stock A Buy Or A Sell?
Learning How To Pick Great Stocks? Read Investor's Corner
MarketSmith: Research, Charts, Data And Coaching All In One Place
