S&P 500 Medtech Play DexCom Leads Five Stocks Near Buy Points

S&P 500 stock DexCom (DXCM) along with New Relic (NEWR), Flywire (FLYW), ASML (ASML) and Kinsale Capital (KNSL) are in focus this week.

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Leading the group is the S&P 500 medical technology stock DexCom. Medical related plays tend to do well in tricky markets and economic conditions because government and private insurance covers the vast majority of health-care costs, making them recession-resistance.

Meanwhile, the Dow Jones Industrial Average along with the S&P 500 and other major stock indexes were down modestly Friday. The stock market rally moved back to a “confirmed uptrend” Wednesday with the Nasdaq hitting 2023 highs. But the Nasdaq gave up weekly gains on Friday, while the S&P 500 retreated for the week and the Dow Jones tested its 50-day line.

Market internals are mixed to weak. So investors should be cautious about adding exposure. These five stocks offer options from a range of sectors, from an S&P 500 medical leader to semiconductor chip plays, if investors feel like taking the plunge.

S&P 500: DexCom Stock

DXCM nudged 0.5% higher to 121.70 in Friday’s market trade. For the week, DexCom stock edged up 0.7%.

The S&P 500 stock is in a consolidating base and is 3% below a 125.65 buy point, according to MarketSmith. DXCM has been bouncing between top of consolidation and the 50-day line for many weeks and recently found support at its 21-day exponential moving average.

DXCM stock also now has a three-weeks-tight pattern, offering a 126.54 entry on a weekly chart.

DexCom specializes in a wearable, continuous glucose monitoring (CGM) system for folks with Type 1 or 2 diabetes, ages two and higher. The sensor measures glucose levels just beneath the skin and sends readings to a smart device in real-time, without finger pricking.

DexCom stock sold off for five days in heavy volume after it posted better-than-expected first-quarter earnings on April 27, though some of the losses were modest or off lows.

DexCom reported 113% earnings growth with sales increasing 18%. DXCM executives also raised the company’s full-year revenue guidance to $3.52 billion, up from the previous estimate of $3.4 billion.

Analysts predict the S&P 500 stock will see Q2 profits jump 35% to 23 cents per share and revenue increasing 21% to $841 million.

S&P 500 stock DCXM ranks fourth in IBD’s Medical-Products industry group. DexCom stock has a best-possible 99 Composite Rating out of 99. The S&P 500 stock has a 93 Relative Strength Rating. The EPS Rating for the S&P 500 stock is 98 out of 99.

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New Relic Stock

NEWR stock rose 1.1% to 74.56 Friday, rebounding from the 21-day line. Shares closed the week up 3.1% to 74.56. On Wednesday, New Relic stock rallied above a down-sloping trendline in its consolidation, offering an early entry. But shares fell back on Thursday. Investors could buy NEWR stock here or with a move above Wednesday’s high of 76.17. The latter would coincide with resistance levels just above 76 — which could be a new early entry.

New Relic stock has formed a base just above a separate deeper consolidation. NEWR has an official buy point of  80.98, according to MarketSmith analysis.

The company makes data analytics software, which extracts and analyzes all manner of data in order to draw conclusions. In addition, it aims to uncover hidden patterns or unknown correlations. It also tries to discover emerging market trends and customer preferences.

Engineers use the company’s data analytics software to measure the planning, building, deployment and running of businesses through a cloud-based, software-as-a-service platform.

NEWR shares rebounded after the company reported mixed Q3 earnings on Feb. 7. New Relic’s quarterly profits surged to 32 cents per share, up from a loss of 18 cents a year ago and easily beating Wall Street estimates. The company missed on revenue views, with sales jumping 7% to $256.5 million. NEWR leapt more than 18% on Feb. 8.

New Relic is due to report fourth-quarter financials on May 23. Analysts predict EPS of 22 cents, up from a loss of 24 cents a year ago. Revenue is expected to total $337.7 million, an increase of 14% vs. last year.

NEWR has a 94 Composite Rating. New Relic stock has a 90 Relative Strength Rating. The EPS Rating is 80 out of 99.

Flywire Stock

FLYW shares edged up 0.2% to 29.58 Friday. On the week, Flywire stock climbed 2.85%. FLYW is flirting with entries at 30.28 or just above the May 8 high of 29.85.

In the wake of its first-quarter earnings report on May 9, Flywire stock rebounded from its 50-day moving average line, briefly crossing those entry points.

The Boston-based payment and transaction services company reported a 3 cents per share loss in Q1, better than expected and narrowing from a 10-cent loss a year earlier. FLYW revenue increased 46% to $94.4 million in the first quarter, topping estimates of $89.1 million.

Analysts project a loss of 15 cents per share in Q2 with sales growing 42% to $73.2 million.

FLYW sits on the IBD 50 list and was Wednesday’s IBD Stock Of The Day. Flywire stock has a 92 Composite Rating. FLYW also has a 94 Relative Strength Rating. The EPS Rating is 64 out of 99.

ASML Stock

ASML stock fell 0.4% on Friday and for the week, closing at 647.51. The stock has formed a cup-with-handle base with a 683.28 buy point, according to MarketSmith analysis.

A move above Wednesday’s high of 660.40 could be an early entry for investors, with ASML stock hovering just above the 50-day line.

On April 19, the semiconductor equipment maker beat Wall Street’s Q1 targets. The Dutch company earned the equivalent of $5.31 a share with sales of $7.24 billion in the first quarter. ASML reports financial results in euros. A year ago, ASML earned $1.88 a share on sales of $3.84 billion, according to FactSet.

Wall Street forecasts second-quarter profits growing 38% to $4.98 per share while revenue is expected to increase 31% to $7.26 billion.

For the year, analysts predict ASML profits will jump 34% to $20.59 per share. Wall Street estimates sales coming in at $28.98 billion, up 25% compared to last year.

ASML stock has a 98 Composite Rating. Shares have an 86 Relative Strength Rating. The EPS Rating is 95 out of 99.

S&P 500: Kinsale Capital Stock

KNSL shares edged down 0.6% to 329.69 Friday. However, Kinsale Capital stock was up 0.4% on the week.

Kinsale Capital stock has formed a cup base with a valid 337.22 buy point, according to MarketSmith. KNSL stock initially topped that entry on April 24, but has generally traded just below that key level. Shares briefly topped that buy point again on Friday.

Kinsale Capital continues to find support at the 21-day line, with the 50-day line slowly catching up.

Kinsale Capital provides casualty and specialty casualty, property, professional lines and transportation insurance products.

The company’s casualty insurance covers everything from cannabis to construction industries. Meanwhile, the specialty casualty unit handles energy, entertainment, environmental, life sciences industries along with product recall and product liability.

Similar to S&P 500 stock DexCom, Kinsale Capital has health care exposure. Its professional lines oversee health and public entities and professional liability coverage. Meanwhile, its transportation unit insures aviation, auto and marine businesses.

On April 27, Kinsale Capital topped first-quarter estimates, with earnings jumping 50% to $2.44 and total revenues of $257 million, up 43% vs. a year ago. Analysts project full-year 2023 profits growing 32% to $10.30 per share, according to FactSet.

Kinsale Capital stock has a 99 Composite Rating. Shares have a 93 Relative Strength Rating. The EPS Rating is 99 out of 99.

KNSL stock is on IBD Long-Term Leaders.

Please follow Kit Norton on Twitter @KitNorton for more coverage.

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