Deere and Dexcom, which has a small new glucose monitoring system, lead this weekend's watch list of 5 stocks near buy points. All of the stocks have sales momentum that's expected to continue, despite some economic uncertainty. Vertiv, which supplies data centers with power and thermal management products, digital-ad verification leader DoubleVerify, and McDonald's fries supplier Lamb Weston round out the list.
All 5 watch-list stocks have recently been featured as IBD Stock Of The Day. Deere stock is part of the flagship IBD 50 list of leading stocks.
Deere
On Friday, Deere posted fiscal Q1 results highlighted by 124% EPS growth and a second straight quarter with revenue growth above 30%. Deere boosted 2023 guidance for net income to a range of $8.75 billion-$9.25 billion from $8 billion-$8.5 billion.
Sales of Deere's production and precision agriculture equipment should rise about 20% this year, lifted by 14% price increases. Construction and forestry equipment sales are expected to grow 10%-15%, thanks in large part to 9% price hikes.
With demand seen outpacing industry capacity, dealer inventories are expected to remain lean, lowering risk to the outlook.
Deere stock jumped 7.5% to 433.31 on Friday, rising back above its 50-day moving average.
After November's attempted breakout from a 7-month consolidation, Deere stock has etched out a flat base over the past 11 weeks. The buy point is 448.50. However, Friday's convincing move past its 50-day line offers an aggressive early entry.
Dexcom
Dexcom just launched U.S. availability of its G7 continuous glucose monitoring system for diabetes patients on Friday. The small patch that can be worn on the back on the arm and deliver data to an app is 60% smaller than its prior version.
The company said on Monday that the device has been approved for Medicare coverage. The European launch last fall is off to a strong start. Dexcom says it's converting users of other body-worn devices, as well as adding patients who previously relied on finger pricks and test strips.
Dexcom already posted Q4 results on Feb. 9, topping estimates and removing one near-term risk. Dexcom earned 34 cents a share vs. a year-ago loss of one cent.
DXCM stock vaulted above its 50-day moving average on Feb. 10 in the wake of earnings. A daily chart shows it has pulled back on soft volume. DXCM stock could finish etching out a handle with a 121.21 buy point after Tuesday. However, the handle is already complete in the weekly chart, with the same buy point.
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Vertiv
Vertiv, based in Columbus, Ohio, with 24,000 employees and operations in more than 130 countries, is set to report Q4 earnings early Wednesday. After an earnings decline in late 2021 and the first half of 2022, Vertiv has bounced back in a big way. EPS is expected to surge 675% to 31 cents on 19% revenue growth to $1.68 billion.
In its Q3 report, Vertiv said its backlog had climbed to $4.7 billion, up 46% from the end of 2021.
Vertiv offers comprehensive power and cooling systems, along with monitoring and services. Being a one-stop shop, along with its breadth of operations gives it a leg up on the competition.
VRT stock edged up 0.2% to 16.06 on Friday. VRT stock is a hair below a 16.17 buy point, 10 cents above its Nov. 10 high.
VRT's relative strength line, the blue line in IBD charts which tracks its progress vs. the S&P 500, is also on the cusp of a 52-week high after crashing on Q4 earnings a year ago.
DoubleVerify
DoubleVerify measures advertising views and engagement by consumers, so companies can tell whether it's getting enough bang for its ad bucks. The company also provides complementary services, such as ensuring that ads are placed in suitable environments for brands, a big issue for social media lately.
The company's biggest sales channels have been Meta Platforms' Facebook and Instagram as well as Alphabet's YouTube, but it's expanding to serve advertisers on TikTok, LinkedIn, Reddit and Twitch.
DoubleVerify also has a new partnership with Netflix, which launched an ad-supported service in November.
"We expect transaction volumes to continue to be the primary growth driver near term, fueled by client wins, international expansion, and channel expansion especially in social, internet TV and retail media," Truist Securities analyst Youssef Squali said in a recent note to clients.
DoubleVerify earnings are due March 1. One strategy to lower risk around earnings is to use call options.
DV stock dipped 1.1% to 27.38 on Friday, but holding above its 21-day line. It's working on a cup-with-handle base, with a 28.99 buy point.
Lamb Weston
Lamb Weston, the Eagle, Idaho, frozen potato and french-fries giant, sells retail and private-label products globally. McDonald's, its largest customer, accounted for 10% of sales in fiscal 2022.
Lamb Weston's fiscal Q2 earnings report in early January was an eye-opener. Sales growth accelerated to 27%, while the company massively raised full-year guidance to a range of $3.75-$4 per share from $2.45-$2.85.
The company said pricing actions to counter higher costs of potatoes and other inputs to drive results. However, strong food-service activity could be a bonus. Sales at restaurants and bars leapt 25.2% from a year ago in January, the Commerce Department said.
Since surging on updated guidance on Jan. 5, LW stock has been carving out a flat base with a 100.87 buy point. LW stock rose 0.5% to 100.48 on Friday.
