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High-Growth Investments
Builders FirstSource, Inc.
Builders FirstSource, Inc. (BLDR), like our new recommendation TopBuild, continues to benefit from increased demand for new homes. You may recall that Builders FirstSource is a leading provider of building products in the U.S., with about 550 locations. The company provides everything from wall panels, roof and floor trusses, stairs and trim to drywall, doors, rails, vinyl windows and siding.
For the third quarter, Builders FirstSource reported total sales of $4.5 billion and adjusted earnings of $533.6 million, or $4.24 per share. Analysts expected adjusted earnings of $3.72 per share, so the company posted a 14% earnings surprise.
For fiscal year 2023, Builders FirstSource remains confident that it will achieve total sales between $16.8 billion and $17.1 billion. The analyst community has also upped full-year 2023 earnings estimates by 4% in the past month. Earnings are now forecast to be $13.59 per share, compared to previous estimates for $13.07 per share. As you know positive analyst revisions typically precede future earnings surprises. BLDR is a Moderately Aggressive buy below $148.
SOM Technicals:
11-17-23: Closed at 133.59. Trade pressures are up. Volumes are bullish. The next target up is 157.31.
11-26-23: Closed at 134.71. Trade pressures are up. Volumes are now neutral. The next target up is 138.72.
12-1-23: Closed at 139.28. Trade pressures are down into the neutral zone. Volumes are bullish. The next target up is 148.97.
12-9-23:Closed at 147.70. Trade pressures are up. Volumes are bullish. The next target up is 156.81 , the prior high.
12-15-23: Closed at 162.51. Trade pressures are up but turning over. Volumes are now neutral. The next target down is 152.40.
Eli Lilly & Company.
Eli Lilly & Company (LLY) is a leading drug manufacturer, and it’s a dominant player in the weight-loss industry these days. Morgan Stanley’s research anticipates that the market for weight-loss treatment could reach $77.0 billion in 2030 – and Eli Lilly’s obesity treatment, Zepbound, stands directly in line to benefit from this booming market.
Just last week, Eli Lilly revealed that its weight-loss treatment received FDA approval. The company’s treatment for type 2 diabetes, Mounjaro, had already received FDA approval, and the company sought to expand its indication. Well, the FDA approved the expansion for the treatment of obesity, and the weight-loss drug will be sold under the brand name Zepbound.
Eli Lilly anticipates that Zepbound will be available as a weight-loss treatment by the end of the year. With the FDA approval, many insurance companies should now cover the treatment, too—so sales are expected to surge. FactSet analysts anticipate that Zepbound sales will crack $11.8 billion in 2025, compared to $4.5 billion in 2023. LLY is a Conservative buy below $647.
SOM Technicals:
10-07-23: Closed at 567.87. Trade pressures are up. Volumes are now bullish. The next target up is 575.41.
10-14-23: closed at 609.20. Trade pressures are up and trending. Volumes are now bearish. The next target up is 636.00. There is the large gap near 460 to fill.
10-27-23: Closed at 560.23. Trade pressures are down. Volumes are bearish. The next target down is 559.00.
11-3-23: Closed at 567.81. Trade pressures are up but turning down. Volumes are neutral. The next target down is 535.00.
11-10-23: Closed at 597.50. Trade pressures are down. Volumes are neutral. Rolling over after the rally, the next target down is 544.70.
11-17-23: Closed at 591.74. Trade pressures are down but rising. Volumes are neutral. The next target up is 629.97.
11-26-23: Closed at 601.10. Trade pressures are up Volumes are neutral. In consolidation. The next target up is 619.40.
12-1-23: Closed at 584.04. Trade pressures are down. Volumes are bearish. The next target down is 573.69.
12-9-23: Closed at 598.05. Trade pressures are up. Volumes are bullish. The next target up is 611.72.
12-15-23: Closed at 571.22. Trade pressures are down. Volumes are down. The next target down is 55.74 then 529.00.
Novo Nordisk A/S
Novo Nordisk A/S (NVO) is our other play on the booming weight-loss market. The company develops treatments for diabetes and obesity, as well as other chronic illnesses, rare blood diseases and endocrine diseases. Novo Nordisk’s leading weight-loss and diabetes treatments are Wegovy and Ozempic. Wegovy has actually been approved by the FDA, as well as by several other countries, as a weight-loss treatment.
But Wegovy has the potential to be more than just a weight-loss drug. Novo Nordisk recently revealed that Wegovy has helped reduce the risk of heart attack, stroke and even death from cardiovascular disease. Based on a Phase 3 study, Wegovy exhibited “a statistically significant 20% reduction in major cardiovascular events.”
Given the positive results from the study, Novo Nordisk has asked the FDA to update the Wegovy label to include the heart benefits for the treatment. This means that the FDA could further expand Wegovy’s approval, making it available to patients with cardiovascular disease. Overall, sales of Novo Nordisk’s Wegovy are anticipated to skyrocket. NVO is a Conservative buy below $108.
SOM Technicals:
2-24-23: Closed at 141.60. Trade pressures are down. Volumes are now neutral. The next target down is 188.22.
3-4-23: Closed at 144.90. Trade pressures are up. Volumes are bullish. The next target up is 149.62.
3-11-23: Closed at 141.29. Trade pressures are down but rising. Volumes are bearish. The next target down is 134.71.
3-17-23: Closed at 139.44. Trade pressures are down but rising. Volumes are neutral. The next target down is 134.74.
3-24-23: Closed at 152.76. Trade pressures are up. Volumes are bullish. The next target up is 159.89.
3-31-23: Closed at 159.14. Trade pressures are up. Volumes are bullish. The next target up is 177.85.
4-14-23: Closed at 168.60. Trade pressures are up. Volumes are bullish. The next target up is 177.65.
4-22-23: Closed at 172.65. Trade pressures are rising into the neutral zone. Volumes are bullish. The next target up is 177.65.
4-28-23: Closed at 167.09. Trade pressures are up. Volumes are now neutral. The next target down is 159.13.
5-7-23: Closed at 163.24. Trade pressures are down but rising. Volumes are neutral. The next target up is 167.92.
5-13-23: Closed at 171.27. Trade pressures are up. Volumes are bullish. The next target up is 177.65.
5-20-23: Closed at 170.54. Trade pressures are up. Volumes are bullish. The next target up is 172.97.
5-27-23: Closed at 162.23. Trade pressures are down but rising. Volumes are bearish. The next target down is 159.13.
6-3-23: Closed at 157.14. Trade pressures are down. Volumes are now bullish. The next target down is 150.57.
6-10-23: Closed at 158.05. Trade pressures are down into the neutral zone. Volumes are neutral. The next target down is 153.05.
6-20-23: Closed at 159.698. Trade pressures are down. Volumes are bullish. The next target down is 156.49.
6-24-23: Closed at 159.07. Trade pressures are down. Volumes are bearish. The next target down is 156.49.
8-25-23: Closed at 186.43. Trade pressures are down into the neutral zone. Volumes are neutral. The next target down is 178.22.
9-1-23: Closed at 189.31. Trade pressures are down but turning up. Volumes are bullish. The next target up is 191.19, the prior high.
9-8-23: Closed at 195.40. Trade pressures are up. Volumes are bullish. The next target up is the 197.54 prior high.
9-16-23: Closed at 190.43. Trade pressures are down/ Volumes are bearish. Made the 201.76 high, but now in pullback mode. The next target down is 188.26.
9-23-23: Closed at 91.30. 2:1 stock split on September 20. Trade pressures are down into the neutral zone. volumes are bearish. The next target down is 89.95.
10-07-23: Closed at 92.21. Trade pressures are up. Volumes are bullish. The next target up is 93.92.
10-14-23: Closed at 102.14. Trade pressures are up. Volumes are bearish. The next target down is 100.52.
10-27-23: Closed at 93.50. Trade pressures are down. Volumes are bearish. The next target down is 86.32.
11-3-23: Closed at 98.17. Trade pressures are down into the neutral zone. Volumes are neutral. The next target down is 95.21.
11-10-23: Closed at 100.95. Trade pressures are down. volumes are neutral. The next target down is 97.79.
11-17-23: Closed at 101.39. Trade pressures are up. Volumes are neutral. The next target down is 92.
11-26-23: Closed at 105.45. Trade pressures are up. Volumes are bullish. The next target up is 112.28.
12-1-23: Closed at 100.40. Trade pressures are down. Volumes are bearish. The next target down is 98.94.
12-9-23: Closed at 96.64. Trade pressures are down. Volumes ae bearish. The next target down is 94.76.
12-15-23: Closed at 97.10. Trade pressures are down into the neutral zone. The next target down is 93.28.
NVIDIA Corporation
NVIDIA Corporation (NVDA) remains our top artificial intelligence play, as the company’s AI chips account for more than 70% of total AI chip sales. Now, the AI chips that NVIDIA has previously designed for China were recently banned by the Biden administration’s new export restrictions. But I anticipate NVIDIA will announce new AI and graphic chips for China that comply with the new restrictions.
This upcoming announcement will not only boost NVIDIA but also the entire chip sector since it would remove much of the uncertainty surrounding new Chinese export rules.
In the meantime, NVIDIA’s earnings announcement on Tuesday, November 21, is expected to attract a lot of Wall Street’s attention next week. For its third quarter in fiscal year 2024, earnings are expected to soar 479.3% year-over-year to $3.36 per share, up from $0.58 per share in the same quarter a year ago. Earnings estimates have been revised 44.8% higher in the past three months, which bodes well for another quarterly earnings surprise.
Analysts also expect third-quarter revenue of $16.12 billion. NVDA is a Moderately Aggressive buy below $573.
SOM Technicals:
5-22-20: Closed at 361.05. Trade pressures are up. Volumes are bullish. The next target up is 364.40.
5-30-20: Closed at 353.67. Trade pressures are rising in to the neutral zone. Volumes are bearish. 333 is a support level.
6-6-20: Closed at 356.80. Trade pressure are up. Volumes are bullish. The next target up is 364.
6-12-20: Closed at 357.30. Trade pressures are down. Volumes are neutral. The next target down is 332.00.
6-20-20: Closed at 370.45. Trade pressures are up. volumes are bullish. At the 364 target: consolidating.
6-26-20: Closed at 366.20. Trade pressures are down. Volumes are bearish. A close below 351.00 would signal lower.
7-4-20: Closed at 384.59. Trade pressures are up. Volumes are bullish. The next target up is 406.07.
7-10-20: Closed at 419.17. Trade pressures are up. Volumes are bearish. a close blow 396 would signal lower.
7-18-20: Closed at 408.10. Trade pressures are down. Volumes are bullish. The next target down is 363.00.
7-24-20: Closed at 407.00. Trade pressures are down. Volumes are bullish. The next target down is 363.00.
May 2021: management announces a 4-for-1 stock split.
10-07-23: Closed at 457.62. Trade pressures are up. Volumes are bullish. The next target up is 460.19, then 491.33.
10-14-23: Closed at 454.61. Trade pressure are up but turning down. Volumes are bearish. The next target down is 431.36.
10-27-23: Closed at 405.00. Trade pressures are down. Volumes are bearish. The next target down is 365.76.
11-3-23: Closed at 450.05. Trade pressures are up. Volumes are bullish. The next target up is 490.93.
11-10-23: Closed at 483.25. Trade pressures are up and trending. Volumes are bullish. The next target up is 491.85.
11-17-23: Closed at 492.65. Trade pressures are up but turning down. Volumes are bullish. The next target down is 472.01.
11-26-23: Closed at 477.76. Trade pressures are down. Volumes are bearish. The next target down is 450.30.
12-1-23: Closed at 467.65. Trade pressures are down. Volumes are bearish for 7 days. The next target down is 450.30.
12-9-23: Closed at 475.06. Trade pressures are up. Volumes are bullish. The next target up is 506.69.
12-15-23: Closed at 488.90. Trade pressures are up. Volumes are bullish. The next target up is 505.48.
Toll Brothers, Inc.
Toll Brothers, Inc. (TOL) is another one of our plays on the boom in homebuilding, as the company is known for constructing quality, luxury homes in the U.S. Toll Brothers has been in the homebuilding business for more than 55 years, and it builds homes in 24 states. The company also builds retirement communities, apartment communities and city living.
Just this week, Toll Brothers announced the grand opening of an active adult 55+ community in Woodbridge, Connecticut. The community includes six carriage-style townhome designs that potential homebuyers can select, as well as a fitness center and swimming pool. The company also announced the opening of The Oaks at Kelly Park in Apopka, Florida. The community includes bungalows, as well as one- and two-story, single-family homes.
Toll Brothers is expected to release results from the most recent quarter on December 5. The current consensus estimate calls for earnings of $3.71 per share on $2.77 billion in sales. Analysts have upped earnings estimates by 12.8% in the past three months, so a fifth-straight quarterly earnings surprise is likely. TOL is a Conservative buy below $92.
SOM Technicals:
8-25-23: Closed at 77.40. Trade pressures are down. Volumes are bullish. The next target down is 72.12.
9-1-23: Closed at 83.83. Trade pressures are up/ volumes are bullish. The next target up is 85.29.
9-8-23: Closed at 80.92. Trade pressures are up into the neutral zone. Volumes are bullish. The next target up is 82.49 resistance.
9-16-23: Closed at 77.87. Trade pressure are down. Volumes are bearish. The next target down is 76.24.
9-23-23: Closed at 74.07. Trade pressures are down. Volumes are neutral. The next target down is 72.97.
11-17-23: Closed at 85.79. Trade pressures are up. Volumes are bullish. The next target up is 88.40.
11-26-23: Closed at 85.52. Trade pressures are up but declining. Volumes are now neutral. The next target down is 83.00.
12-3-23: Closed at 87.78. Trade pressures are up. Volumes are bullish. The next target up is 93.15
12-9-23: Closed at 92.86. Trade pressures are up. Volumes are bullish. The next target up is 97.21.
12-15-23: Closed at 102.79. Trade pressures are up. Volumes are now neutral. The next target up is 115.21, but retracement is likely to close the gap first.