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? Netflix (NFLX), Broadcom (AVGO), Shake Shack (SHAK), Tyson Foods (TSN) and W.R. Berkley (WRB) are prime candidates.
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Nvidia Earnings Are A Key Test For The Stock Market Rally. Here’s What To Expect.
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 were expected for 2024, but the benchmark S&P 500 turned in very strong gains for the first half of the year amid growing confidence that the Fed will reach its goal of a soft landing. The market is roaring back after a recent pullback.
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 IBD Methodology 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.
Using such an approach can help give you an edge over the benchmark 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 Stock Market Direction When Buying Stocks
A key part of investing is to keep track of the 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. The S&P 500 and the Nasdaq got smacked below the key 50-day moving average after July’s jobs report spooked investors, but more positive economic data has sparked both indexes to recapture their 50-day lines.
The stock market is looking bullish again. Now is a good time to raise market exposure by making new stock purchases. Adding stocks to a watchlist for when the next uptrend begins could be a more prudent approach.
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 and Palestine 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
- Netflix
- Broadcom
- Shake Shack
- Tyson Foods
- W.R. Berkley
Now let’s look at Netflix stock, Broadcom, Shake Shack, Tyson Foods and W.R. Berkley in more detail. An important consideration is that these best stocks to buy and watch all boast impressive relative strength.
Netflix Stock
Netflix stock is currently flirting with a cup-base buy point of 697.49, according to MarketSurge analysis. It is actionable as high as 732.36.
The relative strength line sits near fresh highs, a bullish sign. It had been bending higher as it formed the right side of the pattern.
Overall performance is strong, which is reflected in its near-perfect IBD Composite Rating of 98. Earnings performance is also mighty, with its EPS Rating also standing at 98.
Indeed, earnings have grown by an average of 597% over the past three quarters, impressive performance by any standards. EPS is seen rising 59% in 2024 and then slowing to 20% growth in 2025.
Revenue growth has accelerated for four straight quarters.
Institutional sponsorship has been rising of late, with the stock’s Accumulation/Distribution Rating coming in at B-.
NFLX stock has been benefiting from the company’s moves to crack down on password sharing and to offer a cheaper ad-supported tier of service.
Netflix has grown tremendously from its roots as a subscription DVD-by-mail service. It is now the leader in digital streaming, offering subscription video-on-demand service in over 190 countries.
It produces its own content, with hits including “Stranger Things,” “The Crown,” “Squid Game” and “Bridgerton.” But content costs are coming down as rivals license more shows to Netflix once again.
Also, the firm is moving beyond its wheelhouse of movies and shows and into the live events arena.
Earlier this year it announced a deal with TKO Group (TKO) to carry the WWE’s flagship pro wrestling program “Raw” starting in January 2025. The 10-year deal is worth over $5 billion.
Netflix has also announced that it will stream two NFL games on Christmas Day this year. Plus, it will stream at least one Christmas Day football game in 2025 and in 2026.
The addition of live content will help attract advertisers to Netflix, Argus Research analyst Joseph Bonner said.
Netflix stock currently sits at the summit of the competitive Leisure-Movies & Related industry group.
Broadcom Stock
The semiconductor stock offered an early entry after clearing the Aug. 10 high of 167.83. It has slipped back below this level and is fighting to hold the 50-day line.
AVGO shares have also formed a new consolidation that offers a higher 185.16 buy point, MarketSurge analysis shows. It could also be interpreted as a lopsided double-bottom base with a buy point of 177.10.
It’s possible that the Aug. 22 high of 172.42 will become a handle buy point at Wednesday’s close, moments before Nvidia earnings.
Strong overall performance is reflected in AVGO’s IBD Composite Rating of 96 out of 99. Broadcom stock has spiked about 44% so far this year.
Earnings performance is solid at the moment for the chip stock, netting it an EPS Rating of 87 out of 99. Average growth of roughly 6% over the past three quarters is suboptimal though.
Wall Street expects improvement in 2024, with full-year EPS seen rising 13%. EPS growth is then seen accelerating to 27% in 2025.
AVGO stock is displaying emerging leadership, with shares currently sitting near the summit of the competitive Fabless Semiconductors group.
While Nvidia (NVDA) is the leader in general-purpose processors for artificial intelligence, Broadcom leads in making custom AI chips optimized for specific workloads.
JPMorgan analyst Harlan Sur recently reiterated his overweight rating on Broadcom stock with a price target of 200.
In a note to clients he said he believes Broadcom recently scored OpenAI as its fourth major customer for AI chips.
“We believe that Broadcom has recently won OpenAI’s first- and second-generation AI ASIC programs targeted to ramp in calendar 2026,” Sur said.
In addition, Broadcom appears to have added a fifth major AI ASIC customer also targeted to ramp production in 2026, Sur said. He did not identify that fifth customer.
“Management has recently talked about a $150 billion-plus AI semiconductor opportunity over the next 5 years (which implies a 30%-40% per year growth rate in AI revenues over this period of time),” the analyst said.
In addition to Nvidia earnings on Aug. 28, Broadcom’s results are due on Sept. 5.
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Shake Shack Stock
SHAK stock is in the actionable zone above a cup-with-handle base buy point of 105.68, MarketSurge analysis shows. It is buyable as high as 110.96 from this entry.
The base was constructed over a period of 15 weeks. This is a first-stage pattern, which means it has a better chance of netting good gains for investors than do later-stage bases.
The burger stock has been showing bullish action of late, surging as its relative strength line spikes higher. It rallied above its 50-day moving average with gusto before forming its handle.
Shake Shack is the current stock-market burger king, rising around 46% so far this year. This means it is comfortably outperforming the S&P 500 as well as famed rivals like McDonald’s (MCD), which has lost ground so far this year.
The restaurant play is also in the top 9% of issues in terms of price performance over the past 12 months.
The stock holds a very strong IBD Composite Rating of 90. Earnings performance is the weakest part of the picture, with SHAK stock holding an EPS Rating of 79 out of a best-possible 99.
The company recently guided expectations for a full-year revenue increase of 14% to 15%, to range from $1.24 billion to $1.25 billion. Shake Shack also expects to achieve positive free cash flow on the year for the first time since 2017.
Wall Street expects significant improvement at the New York firm. Full-year EPS is seen soaring 97% to 73 cents in 2024 before popping a further 41% next year.
Big Money is putting its money where its mouth is. In total, 68% of shares are held by funds, according to MarketSurge data. An additional 5% is held by management.
Institutions have been net buyers of Shake Shack stock of late, with its Accumulation/Distribution Rating coming in at B. In total, 68% of its stock is currently held by funds. Noteworthy holders include the well-respected Alger Small Cap Growth Fund (ALSCX).
And while robots may not be the first thing that comes to mind when musing about burgers and milkshakes, Shake Shack is making bold strides on this front.
The firm has been given a boost amid the rollout of AI-powered delivery robots. The firm has partnered with autonomous sidewalk delivery company Serve Robotics (SERV) to handle orders through Uber Technologies‘ (UBER) Uber Eats app. The rollout launched at select Shake Shack restaurants in Los Angeles.
Tyson Foods Stock
The food stock is in the buy zone above a cup-base entry of 62.04. This is an early-stage base, which means it is more likely to net big gains.
The chicken and beef giant popped more than 8% above its 50-day line after surging on earnings. It backed off amid broader pressure but got support at the 10-day moving average. The relative strength line is just off near recent highs.
Tyson Foods has a strong but not ideal IBD Composite Rating of 89 out of 99. Earnings performance is improving, with its EPS Rating rising to 79 out of 99.
Wall Street expects more improvement on this front. Analysts expect earnings to soar 111% in 2024 before flying a further 31% next year.
Its stock price has swollen by around 19% so far this year. This is better than the benchmark S&P 500’s lift and hints at rising enthusiasm.
Institutions have been feasting on TSN stock of late, with its Accumulation/Distribution Rating coming in at B. Currently, 53% of its shares are held by funds, according to MarketSurge data. This is a meaty total.
TSN got a boost on Aug. 5 after the firm beat earnings views. This allowed it to outperform the broader market. EPS rocketed 480% to 87 cents as sales inched up 2% to $13.4 billion.
CEO Donnie King took a victory lap following the quarterly report. He boasted that the firm’s “disciplined actions and focus on the fundamentals have resulted in a positive turnaround of our business.”
The company boosted the lower end of its adjusted operating income estimate for 2024 to $1.6 billion from $1.4 billion. It kept the upper end of the guidance here at $1.8 billion. The firm also reiterated that it expects sales to stay relatively flat in 2024.
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W.R. Berkley Stock
While the stock market as a whole recently endured a rainy day, insurance stock WRB continued to look sunny. It formed a cup-with-handle base with an ideal buy point of 58.09 and now trades in the 5% buy zone.
This is a second-stage pattern, which still counts as early. This is a bonus. The stock constructed the base in just under five months and is back above all its moving averages after recently getting buying support around the 50-day line.
W.R. Berkley stock is also above an early entry of 56.66. It is actionable as high as 59.49 from this buy point, though aggressive entries carry added risk.
The stock’s relative strength line has been making progress of late, though it remains off 12-month highs. Further upside here could aid the breakout attempt.
Overall performance is excellent, with WRB stock holding a strong IBD Composite Rating of 93 out of 99.
Earnings performance is a key driver for the firm, with its EPS Rating coming in at a best-possible 99. Price performance is no slouch either, with the stock among the top 16% of issues in terms of price performance over the past 12 months.
The firm has seen earnings rise an average 40% over the past three quarters. This is comfortably clear of the 25% level sought under IBD investing principles.
The property and casualty insurer recent posted a 37% increase in earnings to $1.04 per share, which was better than analyst views. Revenue rose 11% to $3.3 billion.
Longer-term growth is also impressive, with the company’s three-year EPS growth rate sitting at a strong 25%. Wall Street expects earnings per share to rise 26% in 2024 before slowing to 4% growth in 2025.
There has been slightly more buying than selling of W.R. Berkley stock among institutions of late. This is reflected in its Accumulation/Distribution Rating of C+. Overall ownership is already stout, with funds owning 52% of the firm’s shares, according to MarketSurge data.
The lauded Janus Henderson Enterprise Fund (JAENX) is among the noteworthy holders. It kept its holding steady in the most recent quarter.
In June, the company’s board approved a 3-for-2 stock split that went into effect on July 10.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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