Key stock indexes made mild moves en route to a dull finish Tuesday, but some stocks swung sharply following their quarterly results. Under Armour was a case in point, going as high as 44.68 before reversing to a sharp loss after the sports apparel firm reported its first net loss in more than four years.
The Nasdaq composite inched up nearly 0.2%, and the S&P 500 edged fractionally higher. The Dow Jones industrial average finished 0.1% lower. Volume grew sharply on both exchanges in the stock market today, according to preliminary data.
Under Armour (UA) said it lost 12 cents a share in the second quarter, but its adjusted profit of a penny a share met Wall Street's consensus view. Sales jumped 28% to $1 billion, continuing the firm's record of solid double-digit top-line growth. In the prior four quarters, sales grew a respective 29%, 28%, 31% and 30%. Strong footwear sales helped, rising 58% on the back of hot demand for the company's Stephen Curry-endorsed basketball shoes.
As noted in an earlier IBD story, Under Armour wants to bolster its prestige with a new flagship store in the space formerly occupied by FAO Schwarz, the famed Manhattan toy store that closed years ago.
It may be a while, however, before Under Armour becomes a stock market leader. It has been digesting long-term gains since topping at 52.95 in September last year. Tuesday's drop sent the stock back to its 200-day moving average -- useful as a gauge of long-term price trends -- and this line has been sloping lower since May.
Under Armour gets a middling 80 Composite Rating from IBD Stock Checkup. An investor will likely have more success with growth stocks that are breaking out while showing a Composite Rating of 95 out of a maximum 99 or higher.
Meanwhile, Edwards Lifesciences (EW) jumped after hours after it reported bullish Q2 results. The IBD Leaderboard member earned 76 cents a share on an adjusted basis, well ahead of the consensus view of 70 cents. Revenue rose 23% to $759.3 million, sharply beating the $724 million consensus view. The 23% jump stretched Edwards' trend of accelerating top-line growth to a third straight quarter, up from gains of 1%, 9% and 18% in the prior three periods, respectively.
Edwards ended Tuesday's regular session up nearly 2% to 108.31, just past a 107.69 double-bottom-with-handle entry.
Small and medium-sized business expert Ultimate Software (ULTI) reported Q2 non-GAAP profit of 76 cents, up 23% and meeting the consensus estimate, as revenue rose 27% to $187 million. The stock fell 0.4% to 221.83 in the regular session, extended from a recent 209.81 pivot point.
Earlier in the session, JetBlue (JBLU) gained 8% to 18.67 in triple the average volume after the airline posted a 20% jump in Q2 earnings to 53 cents a share, above Wall Street's view, with revenue gaining 2% to $1.64 billion. The stock reclaimed its 50-day moving average but was still flying below its downward-slanting 200-day line. The stock has a lot of lost ground to recover before getting to within proper buy range.
The Dow Jones transport average climbed more than 1% on Tuesday.
Among IBD 50 names, LGI Homes (LGIH) continued to roll higher, rising 2% to 36.20 in heavy trade. It's now advanced nearly 5% past a new handle entry point of 34.60. Homebuilders rallied on the back of better-than-expected U.S. new-home sales in June to an annualized rate of 592,000, sharply past the Econoday forecast of 562,000.
LGI has increased its earnings per share a respective 53%, 124%, 121% and 73% vs. year-ago levels in the past four quarters. Wall Street sees Q2 earnings up 35% to 89 cents a share -- a slowdown from the prior four quarters, but an increase that would still meet the minimum 25% gain as required by IBD's CAN SLIM investment paradigm.
As seen in Monday's Big Picture column and Market Pulse table, the market is currently in a confirmed uptrend. This means an investor has a higher probability of making money when buying breakouts of high-quality growth stocks at proper buy points. The market followed through on June 30.
