A couple times a week, I check my sector scans to get a sense of which are home to the largest number of top-performing stocks. For the past several weeks, the number of companies from the health care sector has far outweighed the runner-up consumer sector.
Earlier this week, I wrote about a couple of smaller stocks with charts showing some potential, but the leaders run the gamut when it comes to market cap.
One longtime standout that remains a winner is Alexion Pharmaceuticals (ALXN), which is up 30% so far this year. Between July and March, the stock notched gains every month. It's not surprising to see the shares finally in consolidation mode, having pulled back from their March 23 all-time high of $95.01.
This is another example of a recent theme in the market -- that is, winners being rewarded. Alexion only corrected 15% from its high and, as of Thursday's close, after regaining some lost ground, was trading about 2% below its peak. It's currently hovering above its short-term five-day exponential moving average.
Thursday's heavy-volume price gains on the major indices were encouraging from a technical standpoint (no comment on the global macro implications) but still not enough to confirm a new uptrend, particularly in an environment where news from Europe can drag stocks back down in a heartbeat.
Alexion would be in a buy zone in a confirmed market uptrend. I continue to like the prospects for this stock, but with the whipsaw market action still very much present, the risk profile remains too high for new buys.
The maker of treatments for autoimmune disorders and other conditions is expected to report its second quarter in July. Analysts have pegged earnings at $0.37 per share on revenue of $262.05 million, which would mark a gain of 28% on the bottom line and 41% on the top line, for a continuation of the trend of double-digit gains in both categories.
Another big-cap leader that has been correcting is Intuitive Surgical (ISRG), a maker of robotic surgical devices.
Here, the 2012 gain is 14%. The stock was climbing at a solid rate in the early months of this year, but corrected 9.5% in May.
Intuitive Surgical has drifted on and off my leadership scans for several years. It struggled in 2010 but began making its comeback in January 2011. The shares closed Thursday at $527.98, 11% below their April 18 all-time high of $594.89.
This company is expected to deliver its second-quarter results in the second half of July. Similar to Alexion, Intuitive has posted a string of double-digit revenue and earnings increases over the past several quarters. It's seen reporting income of $3.53 a share in the current quarter, up 21% from last year's second quarter, while revenue is expected to come in at $519.94 million, for a year-over-year gain of 22%. Intuitive Surgical beat earnings views in each of the past four quarters.
The chart shows me that this stock is nowhere near buyable at this time, as it remains below its 50-day moving average. It still needs more time to complete its consolidation before a technical buy point presents itself.