Health care stocks have been on a run and some are near buy points. Natera, a genetic testing company, is one example of that, and so it is today's selection for IBD 50 Stocks To Watch.
Shares of Natera gapped up in strong volume after fourth-quarter earnings on Feb. 29 and it's holding its gains. Meanwhile, Natera's weekly chart on IBD MarketSurge shows a three-weeks-tight pattern that has a buy point of 93.48.
Natera stock has a Composite Rating of 87 though its EPS Rating lags at 47. Still, the company has outperformed the lion's share of stocks in the Investors Business Daily database and holds a Relative Strength Rating of 96.
Sales Grow 43% In Fourth Quarter
Growth in sales for Natera has ranged between 25% and 43% over the last eight quarters. Sales grew 43% in the fourth quarter to $311.1 million.
Natera showed a loss of 65 cents in the fourth quarter. That was less than half a loss of $1.37 per share in the prior-year quarter. For the upcoming year, the company expects sales of $1.34 billion at the midpoint, up from $1.08 billion in 2023.
Year to date, the stock has gained 45% vs. the S&P 500's gains of 7%.
Mutual Funds Buying Natera Stock
Natera provides genetic testing by examining molecules in blood samples and other body fluids for different procedures such as prenatal screening, cancer care and kidney transplants, among others.
Mutual funds own 82% of outstanding shares. Mutual funds have been net buyers in recent weeks as well, giving Natera an Accumulation/Distribution Rating of A.
The Columbia Small Cap Growth Fund (CMSCX) and the Columbia Acorn Fund (ACRNX) hold shares of Natera stock.
Among exchange traded funds, Natera is a top holding in the GlobalX Genomics & Biotechnology ETF and in State Street's SPDR S&P Biotech ETF.
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