Several health care stocks in the IBD 50 are forming bases, in what could be another emerging wave of leadership.
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Shockwave Medical (SWAV) is approaching a buy point of 308.09 in a cup-with-handle base. The base and handle are deeper than normal, which is a risk for the pattern.
The medical stock has Composite and RS Ratings of 96 and 94 respectively. Sales and earnings growth have been robust over the past seven quarters. Fund managers hold 65% of SWAV stock.
Shockwave holds second place in the medical systems group, which holds 57th place among IBD’s 197 industry groups.
Sales in the March-ended quarter went up 72% to $161.1 million while $1.03 earnings per share grew an impressive 164%. The Santa Clara, Calif.-based company develops approaches to treat cardiovascular diseases through sonic waves that reduce calcification of the arteries. The high-octane growth stock boasts a 40% gain so far this year.
TransMedics (TMDX) is making its way toward a buy point of 90.15 in a cup base, according to IBD MarketSmith.
The third-stage base comes after the stock about tripled from a breakout in June 2022. That’s a risk. However, the growth stock has shown some strong buying action in recent sessions.
Big funds hold 63% of the stock. TransMedics is in the medical products group, which holds lofty 25th place on IBD’s industry groups list.
Sales growth has been impressive for the past six quarters, although the company has yet to turn profitable. Analysts expect a profitable year in 2024.
In the March quarter, its $41.6 million sales were up 162%. Based in Andover, Mass., TransMedics offers organ transplant products and services for end-stage organ failure patients.
Growth Stock Medpace On Watch
Also in a cup with handle is Medpace (MEDP) with a buy point of 231.63. The handle is deep, which is a flaw. But it’s also large enough to be a cup base in itself with the same buy point.
First-quarter sales of $434.1 million marked 31% growth, while $2.27 earnings per share were up 34% from the year-ago period. EPS growth ranged from 26% to 31% the past four quarters.
Medpace leads the medical research equipment and services group. Institutional money has 66% of shares outstanding. The Cincinnati-based company provides clinical development services to biotech, medical device and drug companies.
Intra-Cellular Therapeutics (ITCI) rebounded from its 10-week line and is back in a buy zone from a buy point of 63.50. Strong sales growth has spurred the stock. The biotech hasn’t yet made an annual profit, according to MarketSmith, although analysts expect narrower losses this year and next.
In the March quarter, sales jumped 172% to $95.3 million. A 46 cents per share loss was lower than the 78 cents per share loss during the year-ago period. Fund ownership, which stands at 69% of total shares, is impressive.
The New York company provides treatment for psychiatric and neurological diseases. ITCI is in the biotech group which is ranked 10th.
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