Wednesday's IBD 50 Stocks To Watch pick — Neurocrine Biosciences — is one of the top stocks to watch in the current stock market weakness. This IBD Leaderboard component is just below its latest buy point, easing to a fractional loss ahead of the Federal Reserve decision.
Stocks To Buy And Watch: Neurocrine Biosciences
Founded in 1992, San Diego-based Neurocrine Biosciences develops treatments for neurological and endocrine-related diseases and disorders.
Ingrezza, its biggest moneymaker, brought in $350 million in net sales in the latest quarter. This drug treats an involuntary movement disorder called tardive dyskinesia.
Neurocrine also sells Ongentys, a Parkinson's disease treatment, and partners with AbbVie on women's health drugs. Those smaller sales have disappointed investors.
The company recently scrapped a high-profile treatment for essential tremor, saying the drug failed in mid-stage testing.
The biotech leader's adjusted Q2 earnings climbed 17% to 84 cents per share while sales rose 31% to $378.2 million versus the year-ago period. The Aug. 4 release sent shares up more than 8%.
IBD Stock Ratings
NBIX stock shows a modest 81 out of 99 Earnings Per Share Rating and a perfect "A" SMR grade, according to IBD Stock Checkup. The SMR Rating analyzes a company's sales, margins and return on equity, scaling results from "A" (the best) to "E" (the worst).
In 2021, the company's pretax margins and return on equity measured 20% and 15%, respectively. Meanwhile, sales growth for this top stock to watch has averaged 29% over the last three quarters.
Biotech stocks hold a strong position in the current stock market trend. The industry group ranks sixth out of 197 groups that Investor's Business Daily tracks.
The stock has a strong 97 out of a perfect 99 IBD Composite Rating, ranking among the top stocks within the biotech group. This market leader is a recent addition to IBD Leaderboard and just featured in Stocks Near A Buy Zone.
Stock Market ETF Strategy And How To Invest During A Correction
Neurocrine Stock Eyes Buy Point
Neurocrine is building a flat base with a 109.36 buy point, according to IBD MarketSmith pattern recognition. The relative strength line has been spiking since the drugmaker's last earnings report, hitting a new high on Tuesday.
Wait for a decisive breakout above the entry before deciding whether to purchase shares.
Remember, with the stock market trend in correction mode, breakouts are more likely to fail and investors should be mostly, if not entirely, on the sidelines.
Still, the stock's unusual strength is notable during the ongoing market weakness, so this biotech leader is one of the top stocks to watch.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on top stocks to buy and watch and the stock market.
