Institutional backing is a key element to The IBD Methodology of finding high-quality growth stocks. Monday's IBD Screen of the Day is Stocks That Funds Are Buying. Nine winning names make the list and range from high-growth companies like Palantir Technologies and AppLovin to more defensive names like Walmart and Cintas.
Palantir Stock Pauses Ahead Of Earnings
IBD 50 and Big Cap 20 stock Palantir pulled back 0.6% on Monday afternoon ahead of the company's third-quarter earnings report, due after the market close. Wall Street analysts project 29% profit growth on a 27% revenue increase. Full-year earnings estimates call for a 43% jump in 2024 and a 19% gain in 2025.
Palantir stock is about 8% off its 52-week high reached on Oct. 28. Shares are far extended from the July breakout at a 27.50 buy point.
Mutual funds had renewed interest in Palantir in the September quarter, with 1,419 funds owning shares, up from 1,290 in June. Palantir develops privacy software and platforms and offers data analysis to customers including government agencies.
AppLovin holds an Accumulation/Distribution Rating of A, indicating heavy institutional buying over the last 13 weeks. In addition, 1,194 funds owned shares of the mobile app developer stock in September, up from 1,126 in June.
AppLovin stock is extended from a cuplike base. Shares have climbed more than 300% so far this year.
Walmart Stock Forms Bullish Pattern
Dow Jones stock Walmart has formed a three-weeks-tight pattern with an 83.34 entry, which is also its record high reached on Oct. 23.
The big-box discount retailer has climbed some 20% since its fiscal second-quarter earnings report on Aug. 15. Its fiscal 2025 and 2026 profit is forecast to grow 11% each year. Walmart earns a 4 out of 99 Earnings Stability factor (lower numbers are better for this ranking).
Mutual funds have bolstered their positions in Walmart for three straight quarters, with 3,561 owning shares in September, up from 3,506 in June.
Custom chipmaker Broadcom pulled back to its 50-day line after bumping up to the 185.16 buy point of an irregular base. As of the September quarter, 5,522 funds owned Broadcom stock, increasing from 5,389 in June.
Deckers Forming Base
Deckers Outdoor is in a cup-with-handle base with a 172.57 buy point. The footwear and sandal company topped fiscal second-quarter profit and revenue projections on Oct. 25. Shares gapped up on the report and reclaimed the 50-day moving average. The stock has a highest-possible 99 EPS Rating.
Mutual funds increased ownership of Deckers, with 2,134 funds owning shares in September, up from 2,115 in June.
Uniform rental stock Cintas is another defensive name on the screen. It has a 3 Earnings Stability factor and a 95 EPS Rating as the company continues to deliver consistent annual earnings growth. Fiscal-year profit estimates show a 12% rise in 2025 then 11% in 2026, following the 17% lift in 2024. Shares are hugging the 10-week moving average and finding support.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
