Including Nvidia, Alphabet, Microsoft and Meta Platforms, none of the Magnificent Seven stocks made this month's list of new buys by the best mutual funds from Investor's Business Daily. But energy drink maker Celsius Holdings popped onto that screen as it looks to fuel a new breakout.
These top-performing institutional investors scooped up an impressive $757 million worth of Celsius stock.
Celsius has earned a spot on the IBD 50 list of top growth stocks. It has also popped onto the IBD Leaderboard watchlist as it sets up a new base and buy point. Nvidia has also formed a potential buy point as it lands on the IBD 50 and IBD Leaderboard.
What is driving Wall Street's interest in Celsius stock? It's a combination of strong fundamentals, including 108% earnings growth posted in the energy drink maker's latest report, powerful stock performance, and international expansion.
Shares Make Massive 2,994% Move
After weathering a multiyear slump following its 2017 initial public offering, Celsius fueled an enormous run off a bottom in March 2020. From that low, Celsius stock soared a whopping 2,994% before hitting an all-time high in March
That has driven demand for Celsius beyond making this month's list of new buys by the best mutual funds. The stock currently sports an A- Accumulation/Distribution Rating. Plus, 59 funds with an A+ or A rating from IBD own shares of Celsius stock.
With a 98 Composite Rating, Celsius ranks No. 1 in its industry group, outpacing 98% of all stocks in terms of key stock-picking factors.
International Expansion
This year marks a wave of international expansion for Celsius. To kick off 2024, the company expanded its partnership with PepsiCo, growing its global sales and distribution footprint to consumers in Canada.
Celsius also selected Suntory Beverage & Food in Great Britain and Ireland as its exclusive sales and distribution partner in the United Kingdom, Northern Ireland, the Channel Islands, the Isle of Man and the Republic of Ireland.
In February, Celsius teamed up with racing legend Ferrari through Scuderia Ferrari, a Formula One racing team. The partnership aims to energize Scuderia Ferrari team drivers, crew and fans on and off the track with its beverages.
In late March, Celsius announced plans to expand distribution into Australia and New Zealand. Last month, Celsius unveiled plans to roll out sales and distribution in France.
Celsius Stock: Energizing Earnings
Headquartered in Boca Raton, Fla., Celsius is a fast-growing marketer of fat-burning beverages that contain no sugar, preservatives, aspartame or high fructose corn syrup.
After years of losses, the firm turned its first yearly profit in 2019. In the most recent report on May 7, earnings jumped 108% to 27 cents a share. Sales rose 37% to $355.7 million, below expectations for $390.4 million.
For the current quarter, analysts expect 72% earnings growth to 25 cents a share. On the revenue side, forecasts call for a 32% gain to $430.5 million.
For the full year, Wall Street estimates 40% earnings growth to $1.08 per share, followed by a 35% gain to $1.46 a share in 2025.
Celsius Stock Picks Up Steam
Boosted by its May 7 earnings report, Celsius has jumped back above its 50-day moving average. Its relative strength line has perked up as the stock continues to build a consolidation pattern showing a 99.62 buy point.
CELH stock rose over 4% Monday.
While forming its current base, the 21-day exponential moving average fell below the longer-term 50-day line. Look for the 21-day line to get back above the 50-day benchmark to show rebounding technical strength as a new entry for Celsius stock nears. Volume on the recent upswing has come in above average, once more pointing to demand.
Although absent from the latest list of the latest buys by top funds, Nvidia stock continues to etch a fresh buy point of its own. The entry is 974 in a consolidation pattern as Nvidia maintains support above its 50-day line.
Follow Matthew Galgani on X, formerly Twitter, at @IBD_MGalgani.
