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Energy Stocks, Veterinary Leaders Near Buy Points In CAN SLIM-Based Screen

Of all the screens on the IBD Stock Screener, the CAN SLIM Select list stands apart because it’s an actively managed list, not a computer-generated screen.




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Stocks on the CAN SLIM Select list show traits including strong earnings and sales growth, positive sponsorship and industry group relative strength. The list is generated by NorthCoast Asset Management. The Greenwich, Conn.-based firm runs the CAN SLIM Tactical Growth Fund (CANGX), which is based on IBD’s stock investment model.

Because professional money managers pick the stocks, it gives this screen a human element. The screen also stands apart because today it has 60 stocks, more than just about any other screen.

The latest rendition shows an abundance of financial, health care and natural resources stocks — sectors that have been outperforming.

Two energy stocks forming bases get a closer look in today’s IBD Screen of the Day.

Diamondback Energy (FANG) appears to be putting the final touches on a cup-with-handle base. The stock is less than 10% from the 87.70 buy point.

While the chart pattern is appealing, the handle area is noisy. Volume picked up in the past two weeks that the handle has been forming. Price action has been more volatile. Those characteristics are opposite of what good handle areas should be: quiet. The relative strength line is lagging the stock price, too.

Still, the stock is part of a leading sector. Diamondback Energy is an oil and gas producer in the Permian Basin of Texas and New Mexico. Diamondback is part of the U.S. oil & gas exploration and production industry group, which has been in the top five of 197 groups for eight weeks.

ConocoPhillips (COP) is another energy leader forming a cup with handle. The buy point on this chart is 59.44. The handle in ConocoPhillips’ chart is quieter than Diamondback’s. But ConocoPhillips’ RS line also has some catching up to do.

Two Healthcare Stocks Near Buy Points

In health care, CAN SLIM Select’s choices include Zoetis (ZTS) and Idexx Laboratories (IDXX). Both are providers of veterinary medicines and diagnostic products.

Zoetis saw strong growth in pet-related medicines and diagnostics in the first quarter. EPS jumped 33% to $1.26 a share on sales of $1.87 billion, up 22%. It was the best sales growth in at least 12 quarters.

Shares gapped down, even though results beat views. But the stock soon recovered. Zoetis is now forming an irregular base with a buy point at 176.33.

Idexx also posted strong first-quarter results. The company earned $2.35 per share, an 82% EPS surge, on $778 million in sales for a 24% increase. Organically, sales increased 21%. The results topped analysts’ expectations.

Idexx shares are forming a cup-with-handle base; the buy point is 561.62. The stock has made a much stronger run from the bear market lows than Zoetis, although Idexx is still in an early-stage base. As the May 11 Screen of the Day noted, Idexx is the leader in the 65-company medical systems and equipment group.

Confined to their homes for much of the coronavirus crisis, many Americans took to adopting pets in 2020. That’s lifting sales for pet health products and services providers.

Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia

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