Today’s IBD Screen Of The Day column focuses on stocks to buy and watch on the Global Leaders list of the IBD Stock Screener. The screen looks for foreign-based companies with solid IBD Ratings. Two standout stocks on the list are Accenture (ACN) and STMicroelectronics (STM).
Analyzing Accenture Stock
Accenture, based in Ireland, cleared a flat base with a buy point of 345.62 on Oct. 19. Shares remain inside the 5% buy zone, which tops out at 362.90. The relative strength line of Accenture is also near highs, a good sign.
The digital, cloud and security tech services firm maintains a near-perfect IBD Composite Rating of 97. Accenture stock is part of the promising computer tech services industry group, which ranks No. 13 of the 197 groups IBD measures. Top performers tend to be within leading industry groups.
The company’s year-over-year EPS grew by 11% in the most recent quarter while the top line rose 24%. While these numbers fall short of the 25% minimum we look for in growth stocks, Accenture holds a solid Earnings Stability Factor of 2 for the three-year and five-year periods, on a 0 to 99 scale. For this metric, the lower the number the more stable. This shows that Accenture offers investors stability instead of hypergrowth.
A year-and-a-half ago when the pandemic first swept the globe, Accenture took advantage of a strong surge in client demand for cloud-based services. The company created Accenture Cloud First to connect key services such as migration, cloud-native development, data, AI, industry, talent and more. In fiscal 2021, this move helped drive the growth in its overall cloud revenue from $12 billion the year prior to $18 billion, according to CEO Julie Sweet in the firm’s recent 2021 letter to shareholders.
Accenture is set to report fiscal Q1 2022 earnings on Dec. 16, before the market opens. According to IBD data, the company is expected to show EPS of $2.63 share on revenue of $14 billion.
Switzerland-based Semiconductor Stock
STMicroelectronics stock is setting up a new 47.48 flat-base buy point. The stock remains about 5% away from the proper entry. Investors can use the high on Sept. 27, plus 10 cents, as an early entry as well. That yields an early buy point of around 46.91.
Shares have been trading above the 50-day moving average in recent weeks after dipping below this area of support for a couple of weeks. The Switzerland-based semiconductor firm’s relative strength line has risen sharply over the past few weeks. Still, it remains off its highs. On the negative side, the company maintains a Relative Strength Rating of 76, which is below the minimum 80 we look for in growth stocks.
But STMicroelectronics has a decent Composite Rating of 93. The Swiss manufacturer of semiconductor products primarily serves telecommunication, automotive and industrial markets. The firm may be ripe for an earnings-catalyzed move this week.
According to its investor relations page, STMicroelectronics is set to report Q3 results and current business outlook on Thursday before the market opens. According to IBD data, analysts expect EPS growth of 100% to 52 cents a share on revenue of $3.2 billion. That represents top line growth of 20%, year over year.
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