Biotech leader Intra-Cellular Therapies, Wednesday's pick for IBD 50 Growth Stocks To Watch, is breaking out past a new buy point. That makes ITCI one of the best stocks to buy and watch in today's market.
Intra-Cellular specializes in small molecule drug treatments for neurological diseases, such as Alzheimer's, by targeting intracellular signals in the central nervous system.
Its chief drug, Caplyta, is approved for treating schizophrenia and conditions associated with bipolar disorder in adults. The drug is used as a primary treatment or in combination with lithium or FDA-approved drugs to treat mixed-feature disorders.
On Nov. 2, the company said revenue climbed 76% to $126.2 million during its fiscal third quarter. Analysts had expected revenue of $119.2 million. On an adjusted basis, Intra-Cellular lost 25 cents a share, narrowing from a per-share loss of 57 cents in the year-ago period.
'Significant' Growth For Drug
"Our third quarter results represent another period of significant Caplyta growth, and we are again increasing our revenue guidance for the full year 2023," Chief Executive Sharon Mates said in a company press release following the results.
Mates added, "We continue to solidify Caplyta's position as an important option in the treatment of bipolar depression and schizophrenia and we remain focused on advancing our pipeline, including additional lumateperone development programs."
Analysts project the company will lose $1.80 per share this year, narrowing from last year's $2.72 loss. That loss will further narrow to 66 cents per share in 2024, according to FactSet.
Because the company is unprofitable, and will remain so for the foreseeable future, Intra-Cellular stock has a weak Earnings Per Share Rating of 55 out of a best-possible 99, according to IBD Stock Checkup. This rating takes into account earnings growth and profit stability over the past three years. The two most recent quarters are weighted more heavily.
ITCI stock has a modest 81 out of a best-possible 99 IBD Composite Rating despite a big stock price move since late October. That recent outperformance makes it one of the best stocks to buy and watch in the ongoing stock market rally.
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Stocks To Buy And Watch: ITCI Breaks Out
Intra-Cellular stock is breaking out past a cup with handle's buy point of 63.93, according to IBD MarketSmith chart analysis. ITCI stock reversed 0.5% lower midday Wednesday, but it remained in buy range above the entry following a strong breakout move on Tuesday. The 5% buy zone goes up to 67.13.
A key technical metric to watch is the relative strength line. While ITCI stock's RS line rallied sharply in recent weeks, it remains far from its old highs. That's a sign of long-term stock market underperformance, and investors need to watch that closely to see if it continues to improve.
That brings the stock's breakout attempt into question. Ideally, the RS line should hit a new high on the breakout day or shortly thereafter to confirm the stock as a market leader.
With the stock market outlook in a confirmed uptrend, investors have the opportunity to raise market exposure through buying stocks making strong breakouts. And Intra-Cellular appears to be one of the best stocks to buy and watch Wednesday.
Best Stocks To Buy And Watch
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Royal Caribbean | 112.95 | Cup base | |
| Snowflake | 192.66 | Cup with handle | |
| Microsoft | 366.78 | Cup base |
Source: IBD Data As Of Dec. 13, 2023
Follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
