S&P 500 stocks Tesla, Baker Hughes and General Electric, along with Toll Brothers and Samsara, are in focus for the short week following Labor Day with the market in a confirmed uptrend.
The stock market logged a strong week heading into the long Labor Day weekend, although trade was mixed on Friday as investors reacted to the latest jobs data. The August jobs report showed a cooling labor market. Hiring remains solid. The unemployment rate unexpectedly jumped.
It was still a positive week for the major indexes with a growing number of stocks offering buying opportunities. Investors should be looking to steadily add exposure if the market continues to mend.
The stock market is closed Monday, but when the trading week starts on Tuesday, investors should keep tabs on this list of five top stocks. One good way to keep track is through IBD's SwingTrader, which added Baker Hughes stock and Toll Brothers stock to its portfolio on Friday.
S&P 500: Tesla Stock
Also on Friday, Tesla shook up the auto industry, unveiling its upgraded Model 3 in China and cutting prices by nearly 20% on its higher-end vehicles, the Model S and Model X, in the U.S. Tesla also cut the Full Self-Driving system price to $12,000 from $15,000.
TSLA veered lower on the news, dropping 5.1% to 245.01 in Friday's market trade. On the week, the S&P 500 stock did climb 2.7%. Friday's action sent shares back below their 50-day moving average and to their 21-day line A move back above Thursday's high of 261.18 could offer an early entry for aggressive investors.
Tesla has forged a new base with a proper buy point at 299.29, according to MarketSmith. Shares initially pulled back after the automaker reported second-quarter financials on July 19. Investor concerns over falling gross margins outweighed the global EV giant's above-forecast earnings and revenue. News of sales of Tesla stock from Cathie Wood's ARK Invest ETFs may also have fueled some downside momentum.
Tesla stock ranks fourth in the 35-stock IBD automaker industry group. The S&P 500 component has a 95 Composite Rating out of 99. Tesla stock has an 84 Relative Strength Rating and its EPS Rating is 93 out of 99.
Toll Brothers Stock
The luxury homebuilder gained 2.3% to 83.83 on Friday, just clearing a buy point. On the week, Toll Brothers stock jumped 8.3%. On Wednesday, TOL shares reclaimed the 50-day line, but then kept rising.
Toll Brothers stock has gained 66% in 2023, easily outperforming the S&P 500 index's 17.7% gain.
TOL stock is trading just above a flat base buy point of 83.72, according to MarketSmith. The buy zone extends to 87.91.
Homebuilders have rallied aggressively this year. Rising interest rates have slowed sales of existing houses, driving demand and prices for newly built homes. The broader IBD Building-Residential/Commercial industry group has also performed well in 2023, with the 23 stocks collectively jumping more than 43%.
On Aug. 22, Toll Brothers reported better-than-expected fiscal third-quarter earnings and revenue, buoyed by increased home deliveries and surging unit prices. The luxury homebuilder forecasts new home prices will continue to soar through the end of the year as housing market data shows existing-home sales dropped in July, continuing the 2023 trend.
Toll Brothers forecasts Q4 deliveries between 2,650 and 2,750 units. The luxury homebuilder also expects the average price per unit in the fourth quarter to be between $1.005 million and $1.025 million.
For the full year, the company predicts 9,500-9,600 home deliveries with an average home price of $1.005 billion-$1.015 million. At the end of Q2, Toll Brothers forecast full-year deliveries of 8,900-9,500 units with an average delivered price per home ranging $975,000-$995,000.
Toll Brothers stock ranks third in its housing market industry group. TOL has a muscular 98 Composite Rating out of 99. The stock also has a 96 Relative Strength Rating. The EPS Rating is 97.
S&P 500: Baker Hughes Stock
The oil field services leader gained 1.7% to 36.81 Friday. Baker Hughes stock advanced 4% on the week.
The S&P 500 component has been trading tightly the past five weeks, topping a buy point of 36.48 on Friday. Investors could have plotted an early entry opportunity at 35.62 (which can also be viewed as a handle to a long consolidation). The S&P 500 stock is up about 30% for the year.
The IBD-tracked Oil & Gas-Machinery/Equipment industry group has outperformed the S&P 500 in 2023, gaining more than 27% so far this year. Baker Hughes' earnings and revenue growth accelerated the past two quarters, beating analysts' estimates for that period.
BKR stock scored its breakout as U.S. oil prices topped $85 a barrel on Friday, hitting a 2023 high.
Energy stocks topped the market in 2022, after Russia's Ukraine invasion upended global energy markets. However, oil prices and many energy stocks have fallen off this year.
The S&P 500 stock has a Composite Rating of 99 and a Relative Strength Rating of 92. Its EPS Rating is 91.
Samsara Stock
Software developer Samsara surged just over 13% to 30.93 Friday on second-quarter results that topped Wall Street targets. On the week, IOT shares soared more than 22%. Shares broke out of a double-bottom base with a 29.79 buy point.
IOT stock is in buy range from that entry, but is 18% above its 50-day line. The better entry may have been a trendline break near 28, cleared Friday morning. At this point, investors may want to see if Samsara can tightly tight for a few days.
For the quarter ended July 29, San Francisco-based Samsara reported a profit of 1-cent per share on an adjusted basis vs. a loss of 4 cents a year earlier. Meanwhile, revenue rose 43% to $219.3 million.
Analysts expected Samsara to record a 2-cent loss on sales of $207.5 million. Annual recurring revenue from subscriptions rose 40% to $930 million, topping estimates of $910.3 million. The company also secured its first positive quarter in adjusted free cash flow.
For the current quarter, Samsara forecast revenue of $224 million. That's at the midpoint of its outlook. Analysts project revenue of $220.4 million.
Founded in 2015, Samsara provides sensors and cloud-based software to manage vehicle fleets and industrial operations. The company also provides Global Positioning System (GPS) tracking for trucks, and monitors routes and vehicle performance.
Samsara was the IBD Stock Of The Day Friday. The stock has a 96 Composite Rating and a 98 Relative Strength Rating. Samsara stock has a 71 EPS Rating.
S&P 500: General Electric Stock
GE edged down 0.2% to 114.24 Friday, gaining 2% on the week. The S&P 500 stock is setting up a tight flat base, with a 117.96 buy point. This is the first valid base since January for General Electric stock.
The S&P 500 component has gained around 72% in 2023, reaching a five-year-plus high. It broke out in late January from a cup-with-handle base. Analysts have recently called GE one of the better defensive moves for investors amid an uncertain macroeconomic environment.
On July 25, the industrial leader delivered a quarterly beat-and-raise report, with gains or improvements across its aerospace, gas power and renewable energy segments.
The aerospace segment — sometimes called GE's "crown jewel" — makes jet engines and aviation systems for plane makers including Boeing. GE Aerospace also runs a lucrative aftermarket business for engine repair and maintenance.
General Electric has averaged 40% earnings growth over the past four quarters. Analysts forecast EPS growing 104% in Q3 to 55 cents per share. The S&P 500 stock has a Composite Rating of 92. General Electric has a Relative Strength Rating of 96 and a 76 EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Get An Edge In The Stock Market With IBD Digital
Labor Unions Keep The Heat On Starbucks And Amazon
Learning How To Pick Great Stocks? Read Investor's Corner
How To Handle This Market Rally; 'Magnificent 7' Are All Near Buy Points
