Author: Raj Gupta

Raj Gupta is Director, Research Analyst. After joining the firm in 2002 as a research analyst, Raj was appointed senior equity analyst in 2006, and lead senior equity analyst in 2014—largely because of his ability to select outperforming stocks. He acts as an expert in the O’Neil Methodology and contributes to the direction of product and service line development. He recommends securities for addition to or removal from the U.S. Focus List, or USFL, and the associated alerts to clients. During his tenure, he was part of the leadership that developed the Global Focus List, which marked the firm’s successful expansion into international equity recommendations. He is also a lead on the IPO Rewind report and contributes to weekly summaries on the performance of the U.S. market. Much of his expertise is delivered as highly customized service to clients. RAj earned his Bachelor’s degree in Economics from the University of California, Santa Barbara. He began working at the firm directly out of college, driven by his passion for investing and stocks. An avid soccer player, he built and managed an adult league in the Los Angeles area, in which he still plays. He also enjoys international travel; he and his wife commit to at least one major adventure a year.

Market View

Posted on by Raj Gupta

The U.S. market remains in an Uptrend Under Pressure. The S&P 500 bounced off its 50-DMA after a sharp

selloff earlier this week. The Nasdaq, which is already below its key moving averages, is bouncing into re-
sistance at the converging 50- (13,540) and 100-DMA. The distribution day count stands at seven and four re-
spectively, with one day expiring on the S&P 500 next week.

O’Neil Health Care Weekly

Posted on by Raj Gupta

XLV’s RS line (vs S&P 500) moved back up last week after multiple large-cap Health Care ideas reported beatand-raise quarters and cleared back above key moving averages.

More than 100 Health Care ideas over $1B in market cap reported last week.

O’Neil Health Care Weekly

Posted on by Raj Gupta

XLV’s RS line ( vs S&P 500 ) pulled back last week after multiple near-term extended Health Care ideas
consolidated gains over the last several weeks. Ideas that ran into extended levels pre-print pulled back postprint despite many reporting better-than-expected results. Despite losing some momentum, overall action
remains constructive with few ideas breaking important levels of support.

Market View

Posted on by Raj Gupta

The U.S. market remains in a Confirmed Uptrend. The S&P 500 made another new all-time high Thursday, moving back above its upper channel line and more than 5% above its 50-DMA before pulling back from extended levels Friday. The Nasdaq briefly touched a new all-time intraday high Thursday, before also pulling back on Friday. We continue to view short-term support at the rising 21-DMA for both indices. The distribution day count stands at four and three, respectively, with no expiration for two full weeks.

O’Neil Health Care Weekly

Posted on by Raj Gupta

Over the last five sessions, Commercial Services ( HCSG ), Systems/Equipment ( SWAV ), and Drug Suppliers
( PETQ ) led, while Generic Drugs ( TEVA ), Services ( IRTC ), and Long-term Care ( ENSG ) lagged.

Market View

Posted on by Raj Gupta

The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq closed relatively flat for the week
after each held support along short-term moving averages. The S&P 500 rallied off its 10-DMA Friday to close

back at its upper channel line, while the Nasdaq held its 21-DMA before moving back toward all-time high re-
sistance at 14,175. The distribution day count stands at four each with one expiring on the S&P 500 and two on

the Nasdaq next week.

Danaher

Posted on by Raj Gupta

Key points from this report:

  • Buy Danaher. The stock broke out from a six-month consolidation in heavy volume into new-all-time highs following beat-and-raise Q1 results.
  • Beat-and-raise Q1: Revenue grew 58% y/y, 1% better than last week’s preannouncement and 9% above consensus. EPS increased 140% y/y to $2.52, 43% better than consensus of $1.76. The company is now looking for 2021 core revenue growth in the “high teens,” up from previously expecting “low double-digit” growth. 
  • Bioprocessing business – Cytiva: Through the acquisition of Cytiva, Danaher has become the global market leader for bioprocessing, with 30%+ share. In 2020, Cytiva generated 25%+ core revenue growth and $4B+ in revenue. In Q1, Cytiva accounted for 10% core revenue growth. Before COVID-19, the biotherapeutics industry was expected to grow by double digits through 2025.
  • Base business recovering: Danaher’s base business is now recovering following a 10% y/y decline in Q2 2020. In Q1, core revenue growth accelerated 10% y/y from 3–4% y/y in Q3 2020 and Q4 2020. This business is expected to grow by a high-single-digit percentage in 2021. We believe revenue from diagnostic testing will begin to decline due to global vaccination initiatives, however, tools related to COVID vaccine production will likely remain strong given recurring vaccinations may be necessary for years to come.

 

Market View

Posted on by Raj Gupta

The U.S. market remains in a Confirmed Uptrend. The S&P 500 continues to make new all-time highs, now
gaining 1% or more for four straight weeks. The index is trading above its upper channel line and ~6% above its
50-DMA, the biggest extension since August 2020. Though extended, there are no signs of technical weakness
as the index remains above all major moving averages with low distribution. The Nasdaq is testing all-time high
resistance between current prices and 14,175. Look for the 10- and 21-DMA to act as near-term support should
indices pullback next week. The distribution day count stands at three and four, respectively, with no expiration
next week.