Wednesday's IBD 50 Stocks To Watch pick is medical play Lantheus Holdings, which is trading about 13% below a potential entry following a show of institutional support.
North Billerica, Mass.-based Lantheus makes diagnostics and drugs using radiopharmaceutical technology.
In mid-July, Lantheus stock shot up nearly 60% in a two-day rally to new highs after a Medicare proposal suggested hiking the reimbursement rate for diagnostic radiopharmaceuticals.
Later in July, Lantheus announced second-quarter earnings of $1.80 per share on revenue of $394.1 million, for year-over-year increases of 17% and 23%, respectively. That marked an acceleration in earnings growth from the previous quarter, while sales growth held steady, according to IBD MarketSurge.
With the strength of our balance sheet and radiopharmaceutical expertise, we also announced three strategic transactions that underscore our ongoing commitment to expand our pipeline of radiodiagnostics and radiotherapeutics to address unmet medical needs for significant patient populations," said CEO Brian Markison in the press release.
During the quarter, the company announced its acquisition of NAV-4694, strengthening its position in the Alzheimer's disease market and agreed to invest in Radiopharm Theranostics (RAD), expanding the company's early oncology portfolio. Further, Lantheus acquired global rights to RM2, which targets the gastrin-releasing peptide receptor (GRPR). The acquisition strengthens Lantheus' presence in prostate cancer and expands its pipeline to include breast and other cancers.
The company's earnings for 2024 are expected to rise 7%, according to IBD MarketSurge, with growth of 8% projected for next year.
Keep Trying, Nvidia, But These 19 Stocks Are Already 'Perfect'
Lantheus Stock Eyes Buy Point
Lantheus stock is forming the right side of a cup base that offers a 126.89 buy point. Keep an eye out for a potential handle to offer a lower entry.
Shares have found support around their 50-day moving average since early August.
It's worth noting that the current formation is the first proper base since the stock's uptrend began in January. That means the cup base is a first-stage base, which means a breakout is more likely to succeed than later-stage bases.
Another bullish factor is the stock's relative strength line, which shot to new highs in mid-July. While it remains off those highs, it has trended higher since the middle of August. That's a positive signal, but look for that technical indicator to hit a new high if the stock is able to break out.
With outstanding price performance since January, Lantheus stock boasts a near-perfect 98 IBD Composite Rating, according to IBD Stock Checkup.
Further, market risk has abated in recent weeks and investors should be looking to maintain an exposure level of 80%-100%. And Lantheus stock is among the best ideas to consider, especially if it makes a new breakout.
Nvidia, Apple And Tesla Highlight How To Handle This Market
Other Stocks To Keep An Eye On
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 |
|---|---|---|---|
| Meta Platforms | 542.81 | Cup base | |
| Taiwan Semiconductor | 175.45 | Cup with handle | |
| Ryan Specialty | 69.03 | Flat base |
Source: IBD Data as of Sept. 25
Follow Scott Lehtonen on X at @IBD_SLehtonen for more on the best stocks to buy and watch and the Dow Jones Industrial Average.
