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.

Ipsen

Posted on by Raj Gupta

Key points:

The stock broke out of a 12-week consolidation into all-time highs on 1.4x average daily volume. We recommend adding to positions here. Support is at the rising 50-DMA. We would note that Q2 earnings results are scheduled forJuly 26.

Technical ratings: RS line is at a new high, RS Rating 92, and A/D Rating B+.

Fundamental ratings: EPS Rank 95, SMR Rating A, and Composite Rating 99.

Global Health Care Sector—Medical Devices and Equipment

Posted on by Raj Gupta

Some highlights from the report:

U.S.
  • We recommend an overweight position within Medical Technology as long as the iShares U.S. Medical Devices ETF (IHI) remains above its 50-DMA.
  • The Medical Products industry group is ranked number 2 of 197 and remains the best performing industry group within Health Care.
  • The current 68 profitable companies above $500M in market cap within the Medical Product and Equipment industry groups have a five-year EPS median growth rate of 13% and a five-year median (high-to-low) P/E ratio range between 16 and 42. Over the next year, consensus calls for similar growth and valuation. Next fiscal year’s EPS is expected to grow by a median of 13% with a P/E ratio of 27x.
  • Top Picks: ABMD, ALGN, IDXX, ILMN, EW; Stocks of Interest: OMCL, GHDX
 EMEA
  • Health Care is outperforming over the last 26 weeks and improving over the last four weeks. Within the sector, the Medical Product and Medical Equipment industry groups are also outperforming over the last 26 weeks and improving over the last four weeks.
  • Top Pick: STMN.CH; Stocks of Interest: ELKB.SE, BIM.FR
 APAC
  • Health Care is outperforming over the last 26 weeks and improving over the last four weeks, however much of the gains are coming from drug-related companies as opposed to Medical Technology.
  • Top Picks: AS@H.JP, COH.AU; Stocks of Interest: TOAF.JP, HARA.MY

Market View

Posted on by Raj Gupta

Market Overview :

 

The U.S. market is in an Uptrend Under Pressure. We are encouraged by strong price action and the decline in

distribution this week, but would like to see confirmation next week with bigger volume before we move the mar-
ket back into a Confirmed Uptrend. Distribution now stands at four days on the S&P 500 and five on the

Nasdaq, with one day set to expire on the Nasdaq next Thursday. We are also encouraged by the action of
leading ideas over the last few sessions. Though the majority of leadership continues to consolidate, multiple

ideas have been able to hold and move higher off short-term levels of support over the past week. Our recom-
mendation will be to buy high relative strength ideas at ideal pivot points should we see the major averages hold

these gains early next week and move higher on more convincing volume.
Stocks on our U.S. Focus List: Current Sentiment

Our USFL of 68 ideas gained 1.9% on average this week, outperforming the S&P 500 (+1.5%), but underper-
forming the Nasdaq (+2.4%).

Actionable Focus List ideas: Activision Blizzard ( ATVI ), Alphabet ( GOOGL ), At Home ( HOME ), Calavo Growers
( CVGW ), Diamondback Energy ( FANG ), Fleetcor Technologies ( FLT ), Home Depot ( HD ), Nextera Energy ( NEP ),

Paypal ( PYPL ), PRA Health Sciences ( PRAH ), SS&C Technologies ( SSNC ), Unitedhealth ( UNH ), Vertex Pharmaceu-
ticals ( VRTX )

By Sector
Technology ideas across the U.S. Focus List recovered this week. QTWO, TEAM, SSNC, CRM, MPWR, PSTG, and
GOOGL all found support at their respective 50-DMA, while RNG, NOW, VEEV, and ADSK all regained that

same level. ON, ANET, PAYC, RP, TYL, and NVDA are still trading below their respective 50-DMA. Payment pro-
cessors also did well this week, with six of our eight ideas moving higher off 50-DMA support. SQ, FLT, and

PYPL are leading the group, while GPN and PAGS are lagging. Health Care ideas also remain strong, holding
up well on a relative basis during the market decline, and now beginning to move back toward highs. IDXX,
UNH, ILMN, and PRAH all found support at the 50-DMA, while VRTX is building momentum after last week’s
gap up and setting up to test all-time highs. Conversely, Banks on the list remain weak. TCBI, WAL, and ZION
are still trading around their respective 200-DMA, while SIVB has come 10% off its high and below its 50-DMA.

Vifor Pharma

Posted on by Raj Gupta

Key points:

The stock is breaking out of an 11-week consolidation into all-time highs. We recommend buying shares here. Support is along the rising 50-DMA.

Technical ratings: RS line is approaching a new all-time high, RS Rating of 95, and A/D Rating of A-.

Fundamental ratings: Double-digit EPS and revenue growth expected over the next two years. SMR Rating of C. Composite Rating of 79.

Supernus Pharmaceuticals

Posted on by Raj Gupta

Key points:

The stock is breaking out from a five-week flat base, turning actionable. We recommend adding to shares here. Support is at the rising 50-DMA (~$53.50).

Technical ratings: RS line is at a new high, RS Rating 92, A/D Rating B+.

Fundamental ratings: EPS Rank 99, SMR Rating A, Composite Rating 99.

Vertex Pharmaceuticals

Posted on by Raj Gupta

Key points:

VRTX is actionable today after gapping up through near-term resistance at ~$160. The next level of resistance is all-time highs at $178.25. Underwhelming data from competitor Galapagos (GLPG) removed a major overhang on VRTX shares and will lead to upward revisions on long-term models. Consensus currently calls for 2021 adjusted EPS of $9.21 on revenue of $5.35B.

Technical ratings: RS line is now sharply rising, RS Rating of 44 will improve at the close, and A/D Rating has moved from E to D+ with today’s gap up.

Fundamental ratings: EPS Rank 74, SMR Rating A, Composite Rating 67.

Swedish Orphan Biovitrum

Posted on by Raj Gupta

The stock is building the right side of a seven-week flat base. We recommend adding to current positions here. Support is the rising 50-DMA. Resistance is SEK 194.75.

Technical ratings: RS line is at an all-time high, RS Rating of 93, and A/D Rating of B.

Fundamental ratings: EPS Rank of 99, SMR Rating of A, and Composite Rating of 98