BP stock, the U.K.-based oil giant, and Chinese search and AI play Baidu lead this weekend’s watch list of 5 stocks near buy points. Both BP and BIDU stock have rallied on China’s emergence from Covid, as well as their own growth initiatives. BP (BP) has a host of major oil and gas projects ready to bear fruit. Baidu (BIDU), known as China’s Google, is undertaking a huge expansion of its autonomous taxi service this year. The other stocks to watch also are being fueled by progress in unlocking big growth opportunities.
X
Axon (AXON), the innovator of the Taser, body cameras and cloud-based systems for managing digital records for law enforcement, has big momentum in winning federal contracts. Vertex Pharmaceuticals (VRTX) has a promising pipeline, including a pain treatment that could benefit from a push for non-opioid medicines. Auto supplier Visteon (VC) is seeing contract wins and surging sales for its next-generation cockpit display systems that have taken hold in the luxury EV market.
Axon stock is part of the IBD Leaderboard portfolio of elite stocks, while VC stock is on the Leaderboard watch list. Both Axon and Vertex are on the flagship IBD 50 list.
BP Stock
BP stock dipped 0.1% to 35.50 on Friday. The oil and gas giant is closing in on a 36.21 buy point, 10 cents above its Nov. 30 high.
China’s decision to ditch its zero-Covid policy amid protests has begun reviving growth in the world’s No. 2 economy and should support oil prices this year. Crude oil futures closed at a two-month high on Friday near $82 a barrel.
BP took a hit as it wrote down the value of $24 billion in Russian investments after the invasion of Ukraine. Windfall profit taxes imposed by the European Union and U.K. were another impediment for BP stock. But Sa cotiabank analyst Paul Chen upgraded BP stock to outperform last week, while lifting his price target to 42 from 37. He thinks BP stock has been punished with too big of a valuation gap vs. U.S. peers.
In BP’s Q3 earnings call on Nov. 1, CFO Murray Auchincloss said the company is “moving into a very strong time period,” as projects in the Gulf of Mexico, Indonesia and Mauritania and Senegal all come online.
BIDU Stock
Baidu stock rose 5.9% to 135.75 on Friday. BIDU has etched out a handle with a 139.13 buy point on a weekly chart, but needs another day on a daily chart.
BIDU is the dominant player in China’s search market and has a majority stake in the leading video-streaming platform, iQiyi (IQ). Chinese stocks such as BIDU and Alibaba (BABA) also have recovered as Beijing has signaled an easing of its regulatory crackdown. While U.S.-listed Chinese stocks such as BIDU have faced a delisting threat, China has also signaled openness to comply with U.S. audit standards.
Axon Stock
Axon stock rose 0.5% to 185.02 on Friday. It has a handle on a weekly chart with a 189.72 buy point, 10 cents above its Jan. 13 high. The handle will be valid on a daily chart after Monday.
Axon has reeled out three straight quarters of 30%+ sales growth. The company said it had booked $200 million in sales to federal government customers year to date. In its Q3 letter to shareholders, Axon set a goal of cutting gun-related deaths between police and the public by 50% over the coming decade.
Further improvements to the Taser can boost its installed base by five times, the company says.
On Jan. 10, Credit Suisse analyst Sami Badri tapped Axon as a top pick, citing end-market checks, coming price increases and the company’s prime positioning.
VRTX Stock
Vertex stock rose 0.6% to 309.84 on Friday. Vertex jumped past its 50-day moving average on Tuesday, offering a potential early entry at the time. VRTX stock could be etching out a handle buy point, which would be 312.45, 10 cents above Tuesday’s close. Investors also could use that entry from a down-sloping trendline.
Vertex was Wednesday’s IBD Stock Of The Day. On Jan. 17, SVB Securities analyst David Risinger lifted his VRTX stock price target to 374 from 265. He cited its product pipeline, highlighting a new law that directs the Centers for Medicare and Medicaid Services to make an add-on payment for non-opioid pain medicines. That could drive greater adoption of VX-548, if its Phase 3 trial succeeds in early 2024, he said.
VC Stock
Visteon stock rose 3.7% to 146.87 on Friday. That continued a bounce above VC stock’s 50-day line that began a day earlier, offering an early entry point. Visteon is just shy of an official 147.17 buy point from a cup-with-handle base.
On Thursday, Deutsche Bank analyst Emmanuel Rosner boosted his price target to 172 from 136, giving VC stock a buy rating with near-term catalysts. He expects Visteon to offer strong 2023 guidance and also sees potential rally fodder coming from a March investor day. In its Q3 earnings call on Oct. 27, Visteon CEO Sachin Lawande said the company won $2 billion in new business in the quarter, putting it on track to meet its $6 billion goal for the year.
Since the start of 2021, he said, Visteon has won $2.7 billion in display contracts, mostly at the high end of the auto market.
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