Magnificent Seven stocks Nvidia, Meta Platforms and Alphabet have earned a spot on IBD Leaderboard alongside wealth advisor Blue Owl Capital. But only Owl stock has perched itself on the IBD 50, IBD Big Cap 20 and IBD Sector Leaders, our most stringent screen.
And as Blue Owl Capital pulls off this stock-list trifecta, it has also flashed a telltale signal that Nvidia, Meta and Google stock have not displayed since 2023.
Blue Owl Capital Joins Meta On Elite Screen
The New York-based provider of investment management services to institutional and private clients went public in December 2020.
Now sporting the highest-possible 99 Composite Rating, Blue Owl Capital outranks Meta's 98 rating, as well as Nvidia and Google, which both earn a 96.
Showing strong institutional demand, Blue Owl Capital made this month's list of new buys by the best mutual funds. These money managers scooped up more than $475 million worth of shares of Blue Owl stock.
With Nvidia and Google AWOL from this month's list, Meta Platforms was the only Mag 7 name to earn a spot. Google stock last made an appearance in July. Nvidia has been missing from this screen since June.
Strong And Efficient Growth Drives Demand
In addition to its stellar Composite Rating, Blue Owl Capital earns strong grades for its sales margins and return on equity, or ROE, in IBD Stock Checkup. Its SMR Rating of A shows it is an efficiently run company, as evidenced by a 64.7% annual pretax profit margin and 59.2% annual ROE.
Over the last three years, the company has posted average annual sales growth of 42%. Blue Owl Capital also ranks among the top dividend stocks, yielding 2.9% on an annualized basis.
In the third quarter, the wealth advisory firm generated 25% earnings growth to 20 cents per share. That marked a third-straight quarter of acceleration. For the full year, analysts forecast 20% earnings growth to 78 cents a share, followed by a 19% gain to 93 cents per share in 2025.
Revenue has also been on the rise, notching four quarters of increasing sales. For the third quarter, Blue Owl Capital posted a 40% spike in revenue to $600.9 million. For the fourth quarter, Wall Street expects a 34% year-over-year rise to $629.2 million.
Blue Owl Resets Base Count, Revs Up Buy Point
Having ridden the artificial intelligence boom to big gains, the latest bases for Meta, Nvidia and Google are all late-stage. Such patterns bring more risk since later-stage bases indicate the stock already has made a significant climb. That raises the chances of at least a temporary pullback.
Blue Owl Capital, on the other hand, reset its base count in July, something Nvidia, Meta and Google haven't done since 2023.
A base count is reset when a stock undercuts the low in its prior pattern. Blue Owl stock did that in August following a sharp drop below its 10-week moving average. But boosted by strong earnings reports in the second and third quarters, the stock regained its footing and marched higher. Also note the sharp rise in its 10-week line since resetting the base count.
After breaking out in early October, Blue Owl Capital shot to an all-time high that same month.
Blue Owl stock joined IBD Leaderboard when it cleared a trendline entry near 23.50 in November. That came as Blue Owl Capital flashed a strong bounce off its 10-week line.
Following a short consolidation that fell just shy of qualifying as a flat base, Blue Owl stock has cleared a 24.17 buy point. It remains within the buy zone, which extends up to 25.38.
On Monday, Blue Owl Capital closed at 24.81.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
