Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. So what are the best stocks to buy now or put on a watchlist? Meta Platforms (META), Amazon.com (AMZN), Granite Construction (GVA), Universal Health Services (UHS) and Booking (BKNG) are prime candidates.
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Nasdaq Makes It Three Straight, Eyes 18,000; Meta, Monday.com, ServiceNow In Focus
Inflation and the Federal Reserve tightening rates aggressively worried investors last year. But the market confounded expectations for difficulties and turned in an outstanding performance in 2023. More moderate gains are expected for 2024, but the benchmark S&P 500 turned in its best Q1 gain in years amid growing confidence that the Fed will reach its goal of a soft landing.
Best Stocks To Buy: The Crucial Ingredients
Remember, there are thousands of stocks trading on the NYSE and Nasdaq. But you want to find the very best stocks right now to generate massive gains.
The CAN SLIM system offers clear guidelines on what you should be looking for. Invest in stocks with recent quarterly and annual earnings growth of at least 25%. Look for companies that have new, game-changing products and services. Also consider not-yet-profitable companies, often recent IPOs, that are generating tremendous revenue growth.
CAN SLIM has a proven track record of significantly outperforming the S&P 500. Outdoing this industry benchmark is key to generating exceptional returns over the long term.
In addition, keep an eye on supply and demand for the stock itself, focus on leading stocks in top industry groups, and aim for stocks with strong institutional support.
Once you have found a stock that fits the criteria, it is then time to turn to stock charts to plot a good entry point. You should wait for a stock to form a base, and then buy it once it reaches a buy point, ideally in heavy volume. In many cases, a stock reaches a proper buy point when it breaks above the original high on the left side of the base. More information on what a base is, and how charts can be used to win big on the stock market, can be found here.
Don’t Forget The M When Buying Stocks
A key part of the CAN SLIM formula is the M, which stands for market. Most stocks, even the very best, follow the market direction. Invest when the stock market is in a confirmed uptrend and move to cash when the stock market goes into a correction.
The stock market turned in stunning gains in 2023 and had been building on those gains so far this year. Negative action caused the S&P 500 and the Nasdaq to undercut the key 50-day moving average, but they are back above the most significant benchmarks once again and looking bullish.
The stock market has regained momentum. Now is a good time to make stock purchases, but this should be done in a measured fashion.
Investors should be looking to buy high-quality issues with good growth prospects. The selections below are among the best stocks to buy or watch now. The IBD 50 is also a rich hunting ground.
Nevertheless, it remains crucial to stay on top of sell signals. Any stock that falls 7% or 8% from your purchase price should be jettisoned. Also beware of sharp breaks below the 50-day or 10-week moving average.
Remember, there is still significant headline risk. Inflation could still be an issue, while the Russia-Ukraine conflict is a wild card that has proved its ability to shake the market. The current issues in Israel add even more uncertainty.
Things can change quickly when it comes to the stock market. Make sure to keep a close eye on the market trend page here.
Best Stocks To Buy Or Watch
- Meta Platforms
- Amazon
- Granite Construction
- Universal Health Services
- Booking
Now let’s look at Meta Platforms stock, Amazon stock, Granite Construction, Universal Health Services and Booking in more detail. An important consideration is that these best stocks to buy and watch all boast impressive relative strength.
Meta Platforms Stock
Meta Platforms has formed a cup-with-handle base with an ideal buy point of 514.01 . This is a midstage pattern, according to MarketSurge analysis.
Meta was actionable as it decisively retook its 50-day line on June 5.
The social media stock’s relative strength line is off highs, but shares are gaining traction once again as they build the right side of a base.
Overall performance is very good, which is reflected in META’s perfect IBD Composite Rating of 99. META stock is a member of IBD Leaderboard and the IBD Tech Leaders list.
The stock itself is particularly strong on the technical front. Over the past 12 months, it is in the top 7% of issues in terms of price performance. So far in 2024, Meta stock has risen nearly 47%.
It looks to be gearing up again to drive higher after making strong gains from a prior consolidation. Its latest pattern is 22% deep.
Earnings are seen popping 30% in 2024 before rising a further 31% in 2025.
Big Money has been a net seller of the stock of late, with its Accumulation/Distribution Rating coming in at D-. Nevertheless, 48% of the stock is currently held by funds, according to MarketSurge data, which reflects stout institutional backing.
Meta Platforms holds some of the world’s most successful social media platforms, including its flagship product Facebook as well as Instagram.
The firm is spending to secure a place at the artificial intelligence table. CEO Mark Zuckerberg told analysts that early results from its AI focus show the company “should invest significantly more over the coming years.”
Meta raised its guidance for 2024 capital expenditures by 12%, to $37.5 billion at the midpoint of its range. The company also upped the midpoint of its total expenses by about 1%, to $97.5 billion. The high end of Meta’s capex guidance, $40 billion, would represent a 42% increase from 2023. Capex decreased 12.5% year over year in 2023.
Nevertheless, earnings remain strong at the company. EPS has grown by an average 150% over the past three quarters. In the most recent quarter, earnings surged year over year by 78%.
Amazon Stock
The e-commerce stock has broken out of a new flat base with an ideal buy point of 191.70. It is actionable as high as 201.29,
The stock was able to consolidate near the 50-day moving average after retaking the benchmark during the base-building process. It then broke out in high volume, an encouraging sign.
Strong overall performance is reflected in Amazon’s IBD Composite Rating of 94 out of 99. AMZN stock has popped more than 30% so far this year.
Earnings performance is solid but not ideal, with the EPS Rating sitting at 81 out of 99. Wall Street expects to see an investment phase pay off, though, with EPS seen rising 58% this year before slowing to still-impressive growth of 28% in 2025.
This is on top of already solid performance. Earnings have grown an average of 21% over the past three quarters, just shy of the 25% growth sought by Investor’s Business Daily.
The stock currently sits in second place in the competitive Retail-Internet industry group, just behind Chinese rival PDD (PDD).
Institutional investors have been snapping up Amazon stock of late, with its Accumulation/Distribution Rating coming in at B-. In total, big funds hold 39% of shares.
Amazon is the latest member of the $2 trillion market cap club, reaching the mark for the first time in its history on June 26. Recent strong performance netted AMZN a place on the IBD Leaderboard list of top growth stocks,
Amazon stock followed a target price increase from analysts at Bank of America. The analysts raised their price target for Amazon stock to 220 from 210. They said they believe Amazon can continue to improve the efficiency of its retail operations.
“Retail has been the big driver of recent estimate revisions (over Amazon Web Services), and with (first quarter) efficiencies exceeding expectations, we think Amazon is on a good path to drive more retail margin leverage upside in 2024,” BofA Securities analyst Justin Post wrote Wednesday.
The firm is also reportedly squaring up to Chinese rival PDD’s Temu. It is planning to launch a section of its website dedicated to low-cost items shipped directly from merchants in China, according to The Information.
Looking For The Next Big Stock Market Winners? Start With These 3 Steps
Granite Construction Stock
Shares formed a flat base with a 64.33 buy point on the weekly chart. This qualifies as a bullish base-on-base formation. The June 12 high of 63.06 also could serve as an early entry for aggressive investors.
The stock jumped to a new high on June 20, clearing both entries, but reversed lower.
The relative strength line sits off recent highs, however a sharp upward thrust could help fuel a breakout. The recent RS line decline followed a strong uptrend, and gave it a chance to consolidate.
GVA stock has rallied more than 21% so far in 2024. This means it is comfortably outperforming the benchmark S&P 500.
The stock holds a perfect Composite Rating of 99. Earnings are a key driver for the construction stock, with GVA stock holding an EPS Rating of 92 out of a best-possible 99.
EPS has grown an average of 38% over the past three quarters. It is also in the top 7% of issues in terms of price performance over the past 12 months.
Granite, based in California’s Central Valley, is benefiting from the 2021 infrastructure bill, whose spending is now ramping up. It also has a big backlog of work, is making acquisitions and is raising prices.
“We see a continued strong public and private market environment supported by the IIJA (Infrastructure Investment and Jobs Act) and healthy state budgets across our geographies,” CEO Kyle Larkin said during the firm’s May earnings call.
He also said the firm has been “picking up more work through April of this year than where we were last year at the time, and our margins on that work have increased as well.”
In total, 67% of Granite Construction stock is held by funds, according to MarketSurge data. An additional 1% is held by management.
Universal Health Services Stock
Universal Health Services is trading in the buy zone above a cup-with-handle entry. The ideal entry point was 182.92 and it is actionable as high as 192.07.
UHS stock also forged a high handle within the buy zone, providing an alternate or add-on entry around 190.
The relative strength line is just off highs. The stock made a bullish move in mid-May by recapturing its 50-day line.
Universal Health Services stock has a very strong IBD Composite Rating of 97 out of 99.
Solid earnings have earned it an EPS Rating of 82 out of 99. However, earnings have been accelerating for the past two quarters.
Earnings grew by an average 21% over the past three quarters. However, EPS popped 58% to $3.70 in the most recent quarter, easily clearing expectations.
Further progress is expected. Wall Street analysts expect earnings to grow 31% in 2024 before slowing to 10% growth next year.
UHS stock has seen its stock price swell by nearly 26% so far this year. This is a better gain than the benchmark S&P 500’s.
Institutions have been net buyers of the stock of late, with its Accumulation/Distribution Rating coming in at B. In total, 81% of its stock is held by funds, according to MarketSurge data.
The highly rated Columbia Small Cap Growth Institutional Class Fund is a noteworthy holder. Recent bullish performance won it a spot on the prestigious IBD Leaderboard list of top stocks,
Universal Health Services operates nearly 30 hospitals and almost 200 health centers in 39 states. It operates through Acute Care Hospital Services and Behavioral Health Care Services segments.
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Booking Stock
Booking shares have cleared a cup-base buy point of 3,918, as well as a 3,853 handle buy point.
This is a second-stage pattern, which still counts as early. These are more likely to net big gains for investors.
Booking stock is bouncing after getting support at the 21-day exponential moving average, an encouraging sign
The stock’s relative strength line is trying to turn higher, which could help fuel the breakout.
Overall performance is very strong, with BKNG stock holding an IBD Composite Rating of 97 out of 99. Earnings performance is the biggest feather in its cap, with its EPS Rating coming in at 98.
Underlining this is the fact that the firm has seen earnings surge by an average 47% over the past three quarters. Its three-year EPS growth rate comes in at an eye-popping 164%.
Stock market performance is not ideal, with Booking stock gaining more than 13% for the year so far. This lags the benchmark S&P 500. Nevertheless, it is in the top 10% of issues in terms of price performance over the past 12 months.
Wall Street expects earnings to rise 16% in 2024 before accelerating to 17% growth in 2025.
Big Money has been taking notice, with institutions being net buyers of the stock of late. This is reflected in its Accumulation/Distribution Rating of B. In total, funds own 55% of the firm’s shares.
The lauded Janus Henderson Forty Fund is among the noteworthy holders, as is Fidelity Contrafund.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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