Meta Platform (Meta) and JPMorgan Chase (JPM) tops our list of five hot stocks near a buying window this weekend as the S&P 500 enters the second half of 2024 on track, up 14.5% year to date and within 0.5% of its all-time high. Joining Meta and JPM are enterprise software companies. Monday (MNDY), work supplies and uniforms providers Cintas (CTAS) and off-price apparel retailers Burlington Store (bar).
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Nasdaq rebounds after hitting 18,000; focus on Uber, JP Morgan, Hilton
Meta is IBD Leaderboard Elite stock portfolio. Swing TraderWe also have meta positions that aim to take advantage of short-term trends and stack singles and doubles. MNDY is part of the flagship. IBD50 A list of leading growth stocks. Cintas is on IBD’s watch list. Long-Term Leaders A list of stocks with a proven track record that can be acted upon during a constructive pullback.
MetaStock
Meta, which has made a dramatic recovery to return to the $1 trillion market cap club and join the Magnificent Seven, has seen its stock price stabilize since early April, but further upside is on the way. The recent stabilization of the stock price comes as investors weigh Meta’s dominance in the social media advertising space against the prospect of slowing revenue growth due to tough year-over-year comparisons and heavy AI-related spending.
However, some analysts feel there are more reasons to be bullish. On June 20, KeyBanc raised its price target on Meta shares to 540 from 475 and maintained an outperform rating. The analysts noted that Meta’s higher ad prices in the second quarter should bring quarterly revenue near the high end of its guidance. On June 12, Citi upgraded Meta to buy as a top pick. The analysts noted that ads are appearing at an increasing rate on Reels’ short-term videos, which they believe is one of the reasons Meta is seeing a growing share of ad spend.
Meta approached the buy zone on Thursday but fell 3% to 504.22 on Friday as the stock turned lower. Still, Meta is within 2% of a 514.01 buy point from the cup-with-handle, analysts said. Market Surge analysis.
Amid a flurry of mixed signals, this remains the case, with three major 7 stocks in the buy zone.
JP Morgan shares
JPMorgan announced late Friday that it would raise its quarterly dividend to $1.25 from $1.15, following news this week that it had passed Federal Reserve stress tests and had ample excess Tier 1 capital. Additionally, its board of directors authorized a $30 billion share buyback.
The increased share buybacks come after CEO Jamie Dimon said in an investor call on May 20 that the company “is not going to be buying back a lot of stock at this price.” In the call, the company also raised its outlook for net interest income in 2024 to $91 billion from $90 billion.
Net interest margins tend to benefit when the Treasury yield curve steepens or weakens inversion as longer-term interest rates rise more than shorter-term rates. That’s what happened on Friday, when the 10-year Treasury yield surprisingly rose despite the most benign inflation report since late 2020. The market was apparently reacting to former President Donald Trump’s commanding victory in the debate against President Biden.
Strategists say financial stocks are among the likely beneficiaries of a second Trump term.
On the stock market on Friday, JPM shares rose 1.55% to 202.26. Friday’s move pushed JPM above an early entry point, making now the time to buy. Buy signals flashed as JPM shares surged above their 50-day and 21-day averages and broke a downward sloping trendline from the May 20 high.
JPM’s official flat base buy point is 205.88.
Monday.com Stocks
Monday.com, which IPOed in 2021, continues to grow beyond its roots of providing project management software for small and medium-sized businesses. Featured as an IBD Stock Of The Day on May 28, the company’s cloud-based solutions now also include customer relationship management and product development.
First-quarter revenue rose 34% to $216.9 million, with large customers — those making at least $50,000 in annual recurring revenue — growing by about 50%, William Blair analyst Arjun Bhatia wrote in a May 15 note.
MNDY shares have risen 21.4% since the first-quarter results as the company raised its full-year revenue guidance by $16 million on better-than-expected price hikes and solid demand, but Bhatia said the outlook is conservative.
Monday.com has seen record adoption of new products and also has new releases of its IT services and support software planned for later this year.
The company’s net customer retention rate is 110 percent, and William Blair expects that to increase further as it cross-sells products and gradually increases prices to customers on annual contracts.
Last week, software stocks performed well, sending MNDY shares up 7% to 240.76, bouncing off the 10-week line. On Thursday, the stock cleared the downtrend with a short-term consolidation that is a bit too deep to be a flat base. This looks like a condensed double bottom base with a buy point of 239.54. On Friday, the stock cleared that entry, which is roughly in line with a buy point of 239.22 from the previous base.
MNDY shares rose 1.9% to 240.76 on Friday as software stocks continued their recent strong performance, bouncing off the 10-week line and capping a 7% weekly gain.
MNDY stock carries an excellent IBD Composite Rating of 97, based on a variety of technical and fundamental factors. IBD Stock Checkup.
Trump’s debate win boosted the S&P 500. And then this happened.
Synth Stock
Cintas reported third-quarter results on March 27, reporting a 10% increase in sales to $2.41 billion and a 7.7% increase in organic earnings. Profits rose 22% to $3.84 per share, the second consecutive quarter of accelerating growth.
Ongoing efficiency efforts paid off, with gross profit margins as a percentage of sales increasing to 49.4 percent from 47.2 percent last year.
RBC Capital said in a research note after the company’s third-quarter earnings release that Cintas’ emergency and firefighting businesses are experiencing strong double-digit growth and have plenty of room to grow. RBC raised its price target to 725 from 675 and maintained an outperform rating on the stock.
The date for the fourth-quarter earnings report has not yet been announced, but last year it was July 13th.
CTAS fell 1.6% to 700.26 on Friday, dropping below a buy point of 704.84 after a sideways climb that stretched into late March. CTAS found support at the 21-day index average.
On May 2, Cintas announced a four-for-one stock split that will take effect in September.
Burlington Store Inventory
Burlington Stores was selected as the IBD Stock Of The Day for June 14, setting the stage for a new entry after BURL shares surged 17.6% on May 30 after the company reported better-than-expected first-quarter results and raised guidance. That entry came on June 20, when BURL broke out of a downward trend line from what appeared to be a high-handle formation.
Since then, BURL has risen within the buy zone from a previous cup base that had a buy point at 232.69.
Following the first-quarter report, Evercore ISI raised its price target on BURL to 274 from 270 and maintained an outperform rating. The research firm cited Burlington’s 10.5% sales growth as a positive, but analysts were more hopeful about profit margin growth.
During the earnings conference call, Burlington’s Chief Financial Officer Christine Wolff provided an update on supply chain efforts at distribution centers to “streamline operations, reduce contact, improve product processing times and ultimately save on labor costs.” “In the first quarter, we saw those savings coming in a little faster than we had originally anticipated,” she said.
As a result of these efforts, Burlington is targeting 400 basis points of margin expansion over five years, versus a 6% baseline in 2023. BURL has an IBD Composite Rating of 97 out of 99.
Be sure to read IBD’s The Big Picture column after each trading day to stay up to date on the latest developments in the stock market and what it means for your trading decisions.
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