S&P 500 Parts, Dow Giant; 5 stocks close to buying

Components of the S&P 500 Index GE Aerospace (GE), Cintas (ETC) and Search Lam (LRCX) are in the spotlight this week with the Dow Jones giant Merck (MRK) and Securities in Celsius securities (CELH).

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The stock market rally had a mixed week, with the Nasdaq rising solidly to record highs despite Thursday's downward reversal. But the Dow Jones fell sharply over the week.

These five highlighted stocks all display relative strength and should be on investors' watch lists.

Celsius was Thursday's IBD Stock of the Day. The stock also appears on the IBD 50, Leaderboard Watch List and IBD Big Cap 20.

S&P 500: GE shares

Shares of GE Aerospace gained 1.2% to 167.29 on Friday, up 4.6% for the week. S&P 500 stock rebounds from its 21-day line. This offers a potential complementary entry.

GE stock is slightly below a 170.80 buy point in a tight three-week trend, MarketSurge trend recognition shows. This is another place where existing holders could add shares.

If GE stock continues to stabilize for a few more weeks, a flat base trend could form.

Since the start of the year, S&P 500 stock has surged 64%. It has more than doubled in the past year. On May 7, GE stock reached a 15-year high, then fell slightly.

The relative strength line sits just below the 52-week highs after a long uptrend. The RS line, the blue line in IBD charts, tracks GE stock's progress relative to the S&P 500.

Is GE stock a buy or sell right now?

GE Aerospace — once called GE's “crown jewel” — makes jet engines and aeronautical systems for aircraft manufacturers like Boeing (BA), as well as the military. It also runs a lucrative engine repair and maintenance business in the aftermarket.

The pure-play aerospace and defense company emerged from the great breakup of General Electric, following the splits of GE Vernova (GEV) and GE Healthcare Technologies (GEHC). GE Aerospace retained the GE stock symbol.

GE stock has a Strength Composite Rating of 97. The shares also have a near-perfect Relative Strength Rating of 96 and an EPS Rating of 77.

Dow Jones: Merck shares

Merck fell 1.3% this week to 129.48, but remains near an official flat base buy point of 133.10. Dow Jones stock is up about 1.3% in May.

Among the top stocks in the Dow Jones Index, pharmaceutical giant Merck is trading above its 50-day moving average and generally finding support with its 21-day exponential moving average.

However, its RS range has declined over the past month.

On April 25, Merck surged after the Dow stalwart dominated first-quarter views thanks to its cancer drug Keytruda.

Revenue for the immuno-oncology drug jumped 20% on a bare-bones basis, as reported, to $6.95 billion. That was well above expectations of $6.71 billion, according to FactSet.

Merck has yet to generate revenue from its new drug, Winrevair. The Food and Drug Administration recently approved Winrevair for patients with pulmonary arterial hypertension, or PAH.

For 2024, Merck forecasts revenue of $63.1 billion to $64.3 billion and adjusted earnings of $8.53 to $8.65 per share.

Dow stock has a Composite Rating of 72 out of 99. The stock's Relative Strength Rating is 71. The EPS Rating is 44 out of 99.

Celsius Stock

CELH stock gained 3.8% to 95.15 on Friday. For the week, Celsius stock was up 2.3%. The S&P 500 stock may be operating on a handle near the top of the base of a cup. This would lower the official buy point slightly from the current level of 99.62.

The base of the cut, 32% deep, found support near the top of an earlier consolidation. Its latest entry comes after the stock made a 44% gain from its previous consolidation entry of 68.95.

The stock's relative strength line is right around new highs on its weekly chart.

Celsius has been rocking this year as its May first quarter results marked five straight quarters of triple-digit profit growth. The Boca Raton, Fla.-based company on May 7 reported a 108% jump in profit to 27 cents per share, beating estimates of 20 cents per share. The energy drink maker's revenue jumped 37% to a record $355.7 million in the first quarter, but fell short of expectations of $390.4 million.

Celsius ranks third among the most popular energy drinks in the United States, behind Red Bull and Monster drink (MNST), with an 11.4% share of all energy drink sales in multi-point stores with convenience stores (MULOC) in the first quarter.

Celsius' second-quarter earnings are expected to jump nearly 53% to 26 cents per share on revenue growth of 30% to $424 million, according to FactSet. Full-year earnings are expected to rise about 46% to $1.12 per share, while revenue jumps 32.5% to $1.75 billion.

Celsius stock has a perfect Composite Rating of 99. The stock's RS Rating is 97. The EPS Rating is 80 out of 99.

S&P 500: Lam Research Stocks

LRCX shares rose 1.3% to 970.57 on Friday, part of a 6.4% weekly gain. The S&P 500 component is on a flat base with a buy point of 1,007.39, according to MarketSurge charts. Investors could use Thursday's high at 992.66 as a trigger for a trendline entry.

On May 21, the chip equipment maker announced a 10-for-1 stock split and a $10 billion stock repurchase program.

Chief Financial Officer Doug Bettinger said in the press release that the stock repurchase authorization is “consistent with our plan to return 75% to 100% of free cash flow to shareholders in the form of dividends and share repurchases.” actions”.

In late April, Lam Research significantly beat expectations for its fiscal third quarter and beat guidance for the current period.

Profits rose 11% from a year earlier, ending a streak of four quarters of declines. Revenue fell 2% to $3.79 billion, a much smaller decline than previous quarters.

The S&P 500 member forecast fourth-quarter adjusted earnings of $7.50 per share on revenue of $3.8 billion, which would represent double-digit gains for both.

Lam Research is #9 out of 26 stocks in IBD's Semiconductor Equipment Group. The group's 26 stocks collectively gained nearly 22% in 2024.

Lam Research stock has a Composite Rating of 86 out of 99. The S&P 500 stock's Relative Strength Rating is 89. The EPS Rating is 81 out of 99.

S&P 500: Cintas shares

IBD long-term leader Cintas fell 1.9% on Friday, ending the week down 1.35% at 682.81. The S&P 500 stock is currently trading slightly below a flat base buy point of 704.84.

The 5% buy zone here peaks at 740.08, according to IBD analysis.

The work equipment and cleaning supplies stock rebounded after gaining support at its 50-day line. Cintas is currently just below its 21-day exponential moving average.

The relative strength line has declined over the past two weeks, but from record highs.

It has fallen recently but still sits at a solid level of 88. The S&P 500 stock has gained about 16% so far this year, outperforming the broader market.

Cintas is a leading supplier of uniforms for hospitals, hotels and other industries. The company's earnings per share jumped 22% in the most recent quarter to $3.84, while revenue jumped nearly 10% to $2.4 billion.

This is the second consecutive quarter of accelerated growth in revenue and results.

Gross margin as a percentage of revenue increased to 49.4% from 47.2% the previous year.

Cintas forecasts revenue of $9.57 billion to $9.6 billion for 2024, up from the previous forecast of $9.48 billion to $9.56 billion. It guided earnings to $14.80 to $15 per share, compared to a prior outlook of $14.35 to $14.65.

CTAS stock has a Composite Rating of 89 out of 99. The S&P 500 component's Relative Strength Rating is 86. The EPS Rating is 95 out of 99.

Please follow Kit Norton on @KitNorton for more coverage.

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