3 Stocks with Bullish Fundamentals and Technicals
But wouldn’t it be great to have the best of both worlds? Overlaying fundamental analysis with technical analysis (or vice versa) can be a powerful wa...
Most stock investors rely on some form of fundamental analysis or technical analysis. One approach focuses on the financial strength and growth narrative of a company. The other is purely concerned with chart patterns and price-volume indicators. Both stock picking strategies have plenty of merit.
But wouldn’t it be great to have the best of both worlds? Overlaying fundamental analysis with technical analysis (or vice versa) can be a powerful way to find winning stocks. It can help confirm or refute an opinion and ultimately lead to choosing stocks that look good from both perspectives.
A stock that has compelling growth opportunities, as well as a favorable technical backdrop, gives traders added peace of mind. Here are three such examples:
Is Devon Energy a Good Oil & Gas Rebound Play?
Devon Energy (NYSE: DVN) is an oil and gas company with onshore assets in the U.S. and Canada. It has come a long way since last year when the onset of the pandemic crushed oil demand and prices. With the global economy’s appetite for commodities on the rise and prices significantly higher, Devon Energy has returned to profitability.
Assuming oil and gas demand isn’t derailed by a pandemic setback, Devon will likely continue to deliver strong results as it did in last week’s Q2 report. Its focus on reining in its cost structure and capital spending has it in a position for sustained growth. Ongoing synergies derived from the recent acquisition of WPX should also contribute to stronger bottom-line performances.
In the wake of the Q2 report, three firms have reiterated their ‘buy’ ratings on Devon Energy. The updated target prices range from $35 to $45 which at the midpoint represents 45% upside.
The technicals are also overwhelmingly bullish. Devon Energy has found support at the $25-26 level and has its sights on returning to the low $30’s in the near-term.
Will Jabil Stock Reach its 2000 Peak?
Leading electronics manufacturing services (EMS) player Jabil (NYSE: JBL) has been on a steady climb since its pandemic low. Revenues have not just returned to 2019 levels but are at record highs thanks to broad-based demand from the company’s end markets. While being a supplier of iPhone casings has been a major boost, Jabil is also benefitting from higher demand for its other tech hardware solutions and a growing healthcare business.
In addition to reporting a better-than-expected fiscal Q3, management hiked its guidance for revenue, margin, and core EPS. The revised EPS forecast for FY21 represents 80% annual growth, a reflection of a diversified business model that is firing on all cylinders. The second part of the business, diversified manufacturing services (DMS) has expanded vertically due in large part to the takeover of consumer electronics manufacturer Green Point and healthcare manufacturer Nypro.
On July 23rd, Jabil regained its 50-day moving average following a brief dip below $55. This move reassured investors that the stock is well entrenched in a bullish trend that should persist for at least the next couple of months.
Next month’s Q4 and full-year report will have much to do with where Jabil heads in the next few months. Given the momentum in the business, a bullish FY22 outlook could accelerate the stock’s quest to return to its $68 split-adjusted record high from two decades ago.
Is Apollo Global Management Stock a Buy?
Asset manager Apollo Global Management (NYSE: APO) suffered a sharp downturn during the COVID market crash—but has enjoyed one heck of a ride on the way back up. That ride may have plenty more miles left.
Apollo isn’t your average asset management firm. It specializes in alternative assets and especially credit-linked investments that can be converted to equity. For example, the company may buy senior debt securities issued by a distressed company that can converted to a controlling equity stake when a restructuring takes place. Since Apollo gets involved in these more complex investments that span the capital spectrum, it faces less competition compared to firms that do traditional bond or leveraged buyout deals.
Absent heavy competition and with solid demand for its funds, Apollo is putting together some strong results. Last week it announced that distributable earnings more than doubled year-over-year thanks to a large increase in realizations to $9 billion. Realizations are a measure of revenue recognition that reflect a private equity manager’s completed transactions.
A look at Apollo’s chart reveals a different, but equally bullish realization. The stock’s positioning near the upper end of the Bollinger band and relative strength (RSI) reading around 70 suggest near-term upside may be limited. However, longer term, things look bullish with Apollo having bounced off the $56 support level last month and on track to resume the prior uptrend—and possibility on to fresh record highs above $65. A positive MACD that is below the signal line also bodes well for the medium term.