Two AI Stocks, Ralph Lauren Lead Five Stocks To Watch Near Buy Points

2026-02-21 13:11:20

Fabrinet (FN), American Healthcare REIT (AHR), Ralph Lauren (RL), Construction Partners (ROAD) and Planet Labs (PL) are stocks to watch as they trade near buy points.

The five stocks form a diverse quilt of consumer, AI, infrastructure, health care and space companies. Those are some of the industries that have emerged as many tech stocks slip away from the market’s leadership.

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IBD continues to recommend 40%-60% market exposure. The major indexes have been sluggish since November, unable to find clear direction. The S&P 500 and Nasdaq composite closed higher Friday after the Supreme Court struck down most of Trump’s tariffs. The ruling, however, created new uncertainties, and Trump said he would replace the tariffs with other measures.

Fabrinet Tops Buy Point

Fabrinet broke out of an 11-week pattern Friday and traded 3% above the 531.22 buy point. The relative strength line is also at new highs, providing another bullish signal.

The AI stock quickly rebounded from a 15% two-day sell-off that followed the Feb. 2 earnings report, even though results beat views.

December-ended quarter earnings rose 29% to $3.36 per share on sales of $1.13 billion, a 36% increase, according to MarketSurge, with both showing accelerating growth yet again.

Fabrinet sees first-quarter EPS of $3.45-$3.60, indicating another quarter of faster year-over-year growth. Its revenue target of $1.15 billion to $1.2 billion would maintain the rapid sales pace.

The stock bottomed soon after the report and is now at record highs with a 97 Composite Rating.

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Fabrinet, the No. 1 stock in the contract manufacturing industry, makes optical communications gear, a method of sending data over long distances with high-speed light pulses. Fabrinet also produces optical modules that are essential for AI data centers.

Fabrinet stock has a 21-day average true range (ATR) of 7.69%. The average true range, available on MarketSurge, gauges the characteristic breadth of a stock’s behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves.

American Healthcare A Stock To Watch

American Healthcare is above the 51.02 buy point of its Feb. 11 breakout from a flat base. The buy zone goes as high as 53.57.

The company is a real estate investment trust that owns nearly 300 properties rented to senior housing, skilled nursing and outpatient health care providers. Long-term demographic trends are favorable for those industries. The properties are in the U.S., the United Kingdom and the Isle of Man.

American Healthcare turned profitable last year. It posted funds from operations (the earnings measurement used by REITs) of 6 cents and 33 cents a share in the two most recent reports. Revenue growth ranged from 8% to 12% the past four quarters.

American Healthcare will announce fourth-quarter results on Thursday after the close. Analysts tracked by FactSet expect 15 cents a share on revenue of $609.5 million, up 12%.

Because it passes on most profits to shareholders, American Healthcare acts as a good dividend stock. Most recently, it paid a quarterly dividend of 25 cents a share on Jan. 16. Its annualized yield is 1.91%.

The company announced Feb. 4 that CEO Danny Prosky is taking a medical leave of absence due to a “recent medical event.” The board named Chairman Jeffrey Hanson as interim CEO and president.

American Healthcare has an 80 Composite Rating and 2.94% ATR. That steady price history makes it more possible for shares to continue rising even after a run of more than 250% from an initial breakout in 2024. The most recent base was a third-stage base.

Stocks Rally On Trump Tariff Ruling; Iran News, Nvidia Key

Ralph Lauren Tries To Break Out

Fashion icon Ralph Lauren broke out of a nine-week pattern Friday with a 380 buy point and an alternate entry at 377.07. The buy zone goes to 399. The relative strength line climbed to new highs also, confirming the breakout. But volume was below average.

The stock sank 16% from its Dec. 18 peak until it bottomed on Feb. 5. That’s when the company’s December-quarter results beat views, but sales growth slowed. The numbers raised alarms that the company — sensitive to fickle fashion trends — was losing momentum.

But at least five analysts raised their price targets, citing good elements of the report.

BTIG raised its target to 435 from 400. Analysts said operating margin expanded by 220 basis points to 20.9% as favorable product mix and lower cotton costs more than offset higher tariff and other product costs, TheFly.com reported.

Ralph Lauren’s revitalized marketing and nimble supply chain allowed it to weather last year’s tariff shock better than most other apparel makers.

After slashing losses on the day of the report, the stock continued to rebound, leading to an all-time high.

Ralph Lauren has a Composite Rating of 96, second highest in the apparel manufacturing industry group. Its ATR is 3.35%.

Construction Partners Leads Industry

Construction Partners, the No. 1 stock in the heavy construction industry group, is easing after briefly topping the 138.90 buy point of a cup base Feb. 12. The stock formed a new handle with a 141.90 entry.

The stock had been rallying since it reported December-quarter sales and earnings above expectations on Feb. 5. The Dothan, Ala.-based company also raised its outlook for the current fiscal year.

As with many other heavy-construction companies, Construction Partners is benefiting from a boom in factory, data center and civil construction work. Reshoring trends and the buildout of AI infrastructure are driving most of the growth. The company’s backlog has swelled to more than $3 billion.

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While data centers occupy much of the company’s business, executives say there’s plenty of activity building factories, distribution centers and other projects. Construction Partners also has a growing project list and pipeline for government agencies.

Construction Partners has a Composite Rating of 99, which is impressive in an industry group that’s among the best performing and where a dozen stocks have Composite Ratings above 90. The stock has an ATR of 5.38%.

Planet Labs Another Stock To Watch

Planet Labs found support in a pullback to the 10-week moving average. Traders can use a trendline touching the highs since Jan. 16 to plot an entry around 24.50. Combined with its three-month RS Rating of 98 and a B+ Accumulation/Distribution Rating, the stock seems poised for further gains.

The provider of commercial satellite data broke out of a cup base in December after the company’s October-ended quarter report, which blew by analysts’ expectations. Shares rallied as much as 84% from the 16.78 buy point before they gave back a chunk of those gains.

Planet Labs remains unprofitable, but its losses continue to narrow. In the most recent quarter, its loss was 1 cent per share vs. 3 cents in the year-ago period. Still, analysts expect the company to have another loss in the current fiscal year.

Revenue growth accelerated 5%, 10%, 20% and 33% the past four quarters. Losses are weighing on its Composite Rating of 49.

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Planet Labs operates a network of about 200 earth imaging satellites, and sells its data to agricultural, military, energy, insurance and other types of customers. Its clients include NATO and NASA.

Last month, a half-dozen analysts raised their price targets on the stock. Goldman Sachs, which raised its target to 16.40 from 12.30 and kept a neutral rating, saw favorable trends, including strong pricing, TheFly.com reported.

Despite bullish price and volume action, the stock has a high ATR of 8.97%.

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