ELF Beauty carries out 5 actions close to points of purchase that do not need makeup

Elf beauty (ELF) tops this weekend's watch list of five stocks near buy points, including four consumer stocks. The five stocks, including the hospital operator Universal health services (UHS), have sustainable sources of demand to cope with a somewhat uncertain outlook for consumption and the economy as a whole. Reservation of funds (BKNG), Domino's Pizza (DPZ) and Shops in Burlington (BURL) complete the list.

X

The outlook is changing, with the Federal Reserve offering a more hawkish forecast of a one-time rate cut this year. However, this forecast could change if the moderate inflation data published in recent days continues. At the same time, initial jobless claims hit a nearly 10-month high of 242,000, a sign that the job market could be weakening. If so, it would provide the Fed with clear evidence that its policy is too restrictive.

Both ELF and UHS are part of the IBD Leaderboard Elite Stock Portfolio. ELF is also included in the flagship IBD 50 list of top growth stocks. DPZ and BKNG are the current positions of SwingTrader, which aims to capitalize on short-term trends to accumulate numerous singles and doubles.

ELF, UHS, BKNG and BURL stocks all have an IBD Composite Rating of 97 out of a possible 99, taking into account a range of technical and fundamental factors. Both ELF and BKNG are No. 1 in their industry groups, according to IBD Stock Checkup.

ELF Beauty Stock

ELF was the IBD Stock of the Day Thursday as the cosmetics and skincare brand approached a buy point from a cup-with-handle base.

On May 22, ELF reported its fiscal fourth quarter results, with sales up 71% to $321.1 million, driven by a 50% increase in volume and a 21% increase in average price of goods sold. . EPS rose 26% to 53 cents.

“Elf's value proposition continues to resonate by providing consumers with high quality at accessible prices – with an average retail price of $6.50, compared to $8.00 for traditional analog brands and $40.00 for prestige brands,” wrote William Blair analyst Jon Andersen, reiterating outperformance. rating after fourth quarter results.

On June 4, Cowen raised its price target on ELF stock from 190 to 235, maintaining a buy rating. The firm highlighted ELF's significant expansion potential in international and skincare markets. ELF invested $355 million last August to acquire the Naturium skincare brand, which represented 17% of sales in the fourth quarter.

The ELF slipped 3.9% to 192.63 on Friday, but still climbed 8.4% for the week. On Wednesday and Thursday, ELF reached a buy point of 202.58 cup with handle, according to MarketSurge analysis.

ELF posted an early entry last week with a clear move above its 21-day exponential average, breaking a descending trendline from its 202.58 high. It's still usable.

Universal health stock

Universal Health Services, based in King of Prussia, Pa., operates 27 acute care hospitals and 333 inpatient behavioral health facilities, as well as outpatient and outpatient facilities and a physician network.

Both lines of business exceeded the company's expectations in the first quarter, with acute care patient volumes and behavioral rates falling less than expected. An upward revision to full-year guidance could come in the next earnings period “if these metrics remain strong and stable in the second quarter,” Chief Financial Officer Steve Filton said on the call. results of April 25.

UHS increased its revenue 11% to $3.84 billion in the first quarter, the biggest increase in several years. CEO Marc Miller noted that the acute and behavioral segments benefit from “a significant increase in Medicaid supplemental payments…that help offset several years of inadequate reimbursement levels.”

UBS upgraded the purchase of universal health insurance to neutral on May 20. Analyst AJ Rice wrote that the number of behavioral patients is poised to increase now that a softening labor market allows the company to increase its workforce to meet growing demand.

UHS stock edged up 0.2% to 187.85 for the week, finding support at its 21-day average on Thursday and Friday. UHS is currently in a buy zone, approximately 3% above the 182.92 Cups with Handle buy point.

The development since the UHS breakup on May 30 appears bullish. UHS has charted a tight three-week trend, with weekly price changes of no more than 1.5%. This established an additional buy point above 190.50.

Reservation stock

Booking Holdings was the IBD Stock of the Day on Wednesday as it made a run at two separate buy points. It was a good day for consumer and travel stocks in general, as the most modest monthly core CPI reading since August 2021 revived hopes of a September Fed rate cut.

On June 4, Argus raised its price target on BKNG stock from 4,200 to 4,342, maintaining a Buy rating. The company cited a positive outlook on the online travel group as a whole, but particularly on Booking. Argus highlighted its focus on Europe, the largest contributor to gross margin.

“Looking at our growth in room nights by region, in the first quarter, Asia was up about 15%, Europe and the rest of the world were up in the high single digits, and the United States was up about 15%. rise in the low single digits,” said CFO Ewout Steenbergen. First quarter earnings call.

The focus on Europe seems particularly timely right now, heading into a summer of big tourism events, including Taylor Swift's Eras Tour and the Paris Summer Olympics.

BKNG rose 1.2% to 3859.10 last week. Wednesday's move took BKNG past a 3853 buy point from a handle at the end of a double bottom base. BKNG is now tradeable based on this buy point.

BKNG also has a 3918 buy point on a 17-week flat base, which is also a shallow cup.

Domino Actions

An in-depth article on IBD this month included Domino's among a shortlist of restaurant chains that were thriving in tough times.

A common thread among the winners: “Companies offer a strong value proposition to customers struggling in a high-cost environment. »

Domino coupon packages give it an advantage in terms of cost per person. At a Bernstein conference on May 30, Domino's management indicated that it was “about to get hit” with a series of price promotions, according to TheFly. This includes the McDonalds (MCD) $5 meal value launched June 25 to boost slowing traffic.

Domino's countered with 50% off all pizzas from June 6 to 9, but management noted that its national offer has lasted.

While announcing better-than-expected same-store sales growth in the first quarter on April 29, Domino's maintained its long-term goals. These include annual sales growth of 7%, net store growth of 1,100 per year and operating profit growth of 8%.

DPZ stock rose 1.5% to 521.41 for the week, despite closing lower on Thursday and Friday. Domino's is about 4% below a 542.75 buy point on a six-week flat base.

Burlington Stores Inventory

Burlington Stores was Friday's IBD Stock of the Day as the off-price clothing retailer prepares for a new entry after BURL stock jumped 17.6% on May 30 following its first-quarter results and guidance.

Following the report, Evercore ISI raised its BURL price target from 270 to 274, maintaining an outperform rating. The research firm called Burlington's 10.5% sales growth encouraging, but analysts were even more enthusiastic about the progress in margins.

During the earnings call, Burlington CFO Kristin Wolfe provided an update on supply chain initiatives aimed at “streamlining operations, reducing contact, reducing merchandise processing time and, ultimately saving money on labor” in distribution centers. “In the first quarter, we saw that we were reaping those savings a little faster than we initially anticipated.”

Thanks in part to these efforts, Burlington is targeting a margin increase of 400 basis points over five years, compared to a baseline of 6% in 2023.

BURL slipped 0.5% to 228.02 over the past week, falling back below the 232.69 buy point it crossed on May 30. The formation since May 30 is like a high handle, that is, a handle that forms above the buy point rather than below it.

A break above the trendline descending from the 243.64 high could trigger a new entry. For now, a move above 237 would do the trick.

Be sure to read IBD's The Big Picture column after each trading day to get the latest information on where the stock market is trending today and what it means for your trading decisions.

YOU MAY ALSO LIKE:

These are the 5 best stocks to buy and watch now

Join IBD Live every morning for stock tips before the market

IBD Digital: Unlock IBD's premium stock lists, tools and analysis today

How to Make Money in Stocks in 3 Simple Steps

Market increasingly divided; 3 Titans vie for the crown