Buying stocks that big funds are loading up on can be a winning strategy, as such high-volume purchases can propel a stock upward, allowing investors to participate in the gains. Investor's Business Daily's stock screener identifies stocks that funds are buying, and the IBD Screen Of The Day is a good way to track issues rising on institutional sponsorship. Four stocks — like Palantir, for instance — are notable on the list as they approach buy points.
Palantir stock is building a base. Meanwhile, DoorDash is in a buy zone above a buy point of 269.06 from a cup-with-handle base.
But DoorDash is in a late-stage base that may not net higher gains than early-stage bases. The company has a muscular Composite Rating of 98 out of 99. The company operates a platform and mobile app for restaurant food delivery services and has reported profit during its four most recent quarters. DoorDash has an Accumulation/Distribution Rating of B- with funds owning 56% of outstanding shares.
In the IBD mutual fund index, several funds hold a position, including the Artisan Mid-Cap Fund (ARTMX) and the Allspring Growth Fund (SGRAX).
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Also in a buy zone, TE Connectivity is a stock that funds are snapping up. Shares are above a buy point of 212.76 from an early-stage flat base. TE Connectivity provides antennas, cable networking, fiber-optic connectors and other products used in electric vehicles, data centers and elsewhere.
Earnings and sales accelerated for a second straight quarter during its June-ended period. In the IBD mutual fund index, the Franklin Growth Fund (FKGRX) holds a position. Mutual funds own 59% of outstanding shares of the data center play.
AAR Corp., a member of the aerospace and defense group, is near a buy zone from a buy point of 86.43. Shares on Monday continued a six-day winning streak. AAR holds the best-possible Accumulation/Distribution Rating of A+. Mutual funds own 61% of outstanding shares. The relative strength line has risen sharply.
Palantir Nears All-Time High In Base
At the same time, Palantir is building a base that has a buy point of 190. The buy point is also the stock's all-time high. Palantir has an ideal Composite Rating of 99, while its Earnings Per Share Rating and Relative Strength Rating are a stellar 98. Fund purchases have been strong, giving the artificial intelligence software leader an Accumulation/Distribution Rating of A.
Funds own 34% of outstanding shares. IBD mutual fund index members such as the JP Morgan Large Cap Growth Fund (SEEGX) and the Fidelity Contrafund (FCNTX) hold shares of Palantir.
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