Three IBD Sector Leaders fell on Friday but still hovered around their buy points, even as the stock market plunged in the past three days. These top stocks include computer hardware maker Super Micro Computer (SMCI), semiconductor equipment provider KLA (KLAC) and biotech leader Catalyst Pharmaceuticals (CPRX).
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Catalyst was a top stock to watch earlier this week but became overextended, as mentioned in Tuesday’s IBD’s Stocks To Watch profile. It then fell for three-straight days, nearing the 7% sell zone from a cup-with-handle buy point of 16.76.
The Miami-based biotech sells a treatment for a rare autoimmune condition called Lambert-Eaton myasthenic syndrome, or LEMS. The disease affects communication between the nerves and muscles, sapping away muscle strength. The condition is closely tied to forms of cancer.
Catalyst is also looking to expand its pipeline through an acquisition or partnership.
Catalyst Stock Needs Another Catalyst
Chief Executive Patrick McEnany said during the third-quarter earnings call Nov. 10 that a deal may be close.
“Currently, we are in advanced stages of due diligence to acquire commercial-stage products and/or companies,” he said. “And while no agreements have been reached to date, we are hopeful that we will be in a position to announce a transaction later this year.”
In early November, top stock Catalyst trounced Wall Street’s third-quarter forecasts and raised its full-year outlook.
Meanwhile, KLA seems to be holding up well despite three days of lower prices that dragged shares below their 392.60 buy point from a cup with handle. Look for this semiconductor equipment stock to regain ground if the market comes roaring back in a Santa Claus rally.
The company has expanded its capabilities through recent acquisitions.
KLAC stock is trading well above its 50-day line after rebounding from its 200-day moving average on Nov. 10, a positive sign for the base.
Shares hold a Composite Rating of 98 while the 90 Relative Strength Rating is adequately strong. The relative strength line is near a 52-week high on the weekly MarketSmith chart — another positive sign.
KLA stock ranks second in the Electronics-Semiconductor Equipment industry group. The group is ranked 34th among IBD’s 197 industry groups, moving up from 123 just four weeks ago. Other sector components include Axcelis (ACLS) and Aehr Test Systems (AEHR).
Top Stocks: Computer Hardware Maker Defies Headwinds
Top stock Super Micro Computer has perfect 99 Composite and Earnings Per Share Ratings, and a near-perfect 98 Relative Strength Rating.
The maker of computer hardware broke out of a cup base with a buy point of 75.03 following the latest earnings report. And the stock briefly reached its profit-taking zone, climbing between 20% or 25%. It has fallen back to earth since then but is still hugging the top of its buy zone.
In the third quarter, sales grew an impressive 79% year over year to $1.8 billion, while earnings of $3.42 per share grew a whopping 490% from 58 cents last year.
The San Jose-based tech operation makes storage systems, graphic processing units, power and chassis products for enterprises, cloud, AI applications and data center computing.
Follow Michael Molinski on Twitter @IMmolinski
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Read More: Top Stocks: Computer Hardware, Chip Equipment And Biotech Sector Leaders