Wednesday's IBD 50 Stocks To Watch pick, medical leader TransMedics, is rebounding from a key support level, placing the top growth stock in a new buy area. TMDX stock rallied more than 4% midday Wednesday, before reversing lower. Still, TMDX is one of the best stocks to watch in today's stock market.
Started in 1998, Andover, Mass.-based TransMedics produces living organ transplant systems. The systems are designed to maintain organs in a functioning state outside the human body during transport from the organ donor to the recipient.
In the company's latest earnings report, on May 1, TransMedics said its per-share loss narrowed to 8 cents. Revenue jumped 162% to $41.6 million vs. the year-earlier period.
"In the first quarter we made significant progress in scaling production capacity while further demonstrating the transformational impact of our OCS technology and National OCS Program on organ transplantation in the U.S.," commented CEO Waleed Hassanein in the news release.
Hassanein continued, "Even with this strong performance we believe we remain in the early stage of our longer-term growth trajectory as we strive to continuously deliver more lifesaving organs to more patients while also expanding our reach across the United States and globally."
TMDX Stock Set To Turn Profitable
With the company unprofitable, TransMedics stock has a weak 61 out of a perfect 99 Earnings Per Share Rating, according to IBD Stock Checkup. This rating takes into account EPS growth and stability of earnings over the past three years, with the two most recent quarters weighed more heavily.
TransMedics doesn't have a three-year EPS growth rate because the company hasn't made a profit yet, according to IBD MarketSmith. But the company is on track for modest losses in 2023, before turning profitable in 2024, per FactSet estimates.
TMDX stock shows a solid 92 out of a perfect 99 IBD Composite Rating due to stellar price performance since February 2022. On April 21, the stock had advanced as much as 801% from the stock's low price of 10 on Feb. 24, 2022.
The IBD Composite Rating is designed to help investors easily gauge the quality of a stock's fundamental and technical metrics.
Organ Transplant Leader One Of Best Stocks To Buy And Watch
On Tuesday, TransMedics stock decisively regained its key 50-day line, placing the medical leader in a new buy area. In addition, shares are moving up the right side of a cup base, per IBD MarketSmith chart analysis. The buy point is 90.15.
Keep an eye out for a potential handle. That would lower the buy point. Shares slipped 1.8% midday Wednesday, reversing lower along with the tech-heavy Nasdaq composite.
The stock's relative strength line bounced recently, but it's still pretty far from its old highs. That's a key technical indicator to watch. It should hit a new high on the breakout day or shortly thereafter to confirm the stock's market-beating strength. Remember, the RS line measures a stock's price performance vs. the S&P 500 and is the blue line plotted on every IBD chart.
Boasting strong price performance over the last 16 months, TMDX stock is one of the best stocks to buy and watch in today's stock market.
With the stock market in a confirmed uptrend, investors should be on the lookout for top stocks breaking out. Despite Wednesday's midday losses, IBD recommends exposure in stocks at 60% to 80% of your portfolio.
Best Stocks To Buy And Watch
Three recent IBD 50 Stocks To Watch picks, which are among the best stocks to buy and watch. Axcelis and Confluent are extended, however.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Confluent | 29.72 | Cup base | |
| Axcelis Technologies | 136.38 | Cup base | |
| Fortinet | 69.07 | Flat base |
Source: IBD Data As Of June 7
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
