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), Meta Platforms (META), Freshpet (FRPT), Broadcom (AVGO) and Sea (SE) are prime candidates.
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Interest Rate Cuts Coming: Implications For Investors Ahead Of The September Fed Meeting
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.
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. While there was more choppy action at the start of September, the Nasdaq and the S&P 500 have now recaptured the important technical benchmark.
The stock market is looking bullish again despite recent wobbles. 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.
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
- Meta Platforms
- Freshpet
- Broadcom
- Sea
Now let’s look at Netflix stock, Meta Platforms, Freshpet, Broadcom and Sea 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 just below a cup-base buy point of 697.49, according to MarketSurge analysis. It is actionable as high as 732.36. It is currently breaking a downtrend, which offers an early entry.
NFLX has been getting support at the 21-day exponential moving average as well as the 50-day line. In addition, 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 standard. 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 steady of late, with the stock’s Accumulation/Distribution Rating coming in at C.
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.
Meta Platforms Stock
The social media stock is offering an early entry as it clears its 50-day and 21-day lines and breaks a downtrend.
It has also formed a consolidation with an ideal entry point of 542.81, MarketSurge analysis shows. Additionally, a three-weeks-tight pattern has also formed, which offers a slightly higher buy point of 544.23.
Overall performance for META is very strong, earnings it an IBD Composite Rating of 93 out of 99. Meta stock has spiked more than 48% so far this year.
Earnings performance is strong at the moment for the Facebook parent, netting it an EPS Rating of 96 out of 99. EPS has grown by an average of 114% over the past three quarters, easily above the growth levels sought by investors following The IBD Methodology.
Wall Street expects improvement in 2024, with full-year earnings per share seen rising 37%. EPS growth is seen slowing to 14% growth in 2025.
Meta stock is showing leadership, with shares currently sitting in first place in the competitive Internet-Content industry group.
In total, 47% of META stock is currently held by funds, according to MarketSurge data. A number of noteworthy funds are backers, including the Fidelity Contrafund (FCNTX) and the MFS Growth Fund (MFEGX).
Meta Platforms has a robust roster of social media properties including Facebook, Instagram and WhatsApp.
The firm is betting big on the nascent space of artificial intelligence. The firm told investors it expected to spend between $37 billion and $40 billion on capital expenditures this year, up from its previous range of $35 billion to $40 billion. The company also said it expects “significant capital expenditures growth” for 2025.
Those investments will focus mostly on building advanced data center capacity to support training and deploying AI algorithms.
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Freshpet Stock
FRPT stock is back in the buy zone above a consolidation buy point of 136.35, MarketSurge analysis shows. It is buyable as high as 143.17 from this entry.
This is a second-stage pattern for FRPT. This is a bonus as early-stage bases are more likely to post good gains.
The pet food stock dug in amid recent broader volatility and got support at its 21-day line. Its relative strength line is near recent highs.
The Bedminster, N.J.-based pet food specialist makes steam-cooked, grain-free and antioxidant-rich meals for dogs and cats. Freshpet exclusively focuses on “fresh” pet food made with fresh meat, vegetables and fruits.
Freshpet has clawed its way to the top of the Packaged Food industry group. Stock market performance is particularly strong, with the stock up about 62% so far in 2024. This means it is comfortably outperforming the benchmark S&P 500.
The animal play is also in the top 5% of issues in terms of price performance over the past 12 months.
The stock holds a very strong IBD Composite Rating of 92. Earnings performance is the weakest part of the picture, with FPRT stock holding an EPS Rating of 73 out of a best-possible 99.
Wall Street expects significant improvement on this front, though. Freshpet is seen swinging from a full-year loss of 62 cents per share to a profit of 73 cents in 2024. EPS is then seen popping 80% next year.
Big Money is a strong backer of Freshpet. In total, 75% of shares are held by funds, according to MarketSurge data. An additional 4% is held by management.
Institutions have been net buyers of late, with the stock’s Accumulation/Distribution Rating coming in at A-. Noteworthy holders include the well-respected Virtus KAR Mid-Cap Growth Fund Class A Fund (PHSKX).
FRPT stock is a member of the IBD Leaderboard list of top stocks.
Broadcom Stock
The chip stock is offering an early entry as it breaks a trendline and clears the 50-day line. If it can clear resistance at 172.42 this serve as another buying opportunity.
In addition, the stock is shooting for a consolidation pattern entry point of 185.16, according to MarketSurge analysis. This is a third-stage base, which counts as mid-stage.
The stock is is seeing its relative strength line bend upward, though it remains off recent highs.
Shares plunged on Sept. 6 following its fiscal Q3 earnings report, but has roared back after finding support at the 200-day line.
Excellent all-around performance is reflected in AVGO’s near-perfect IBD Composite Rating of 98. Earnings performance is excellent here, with Broadcom holding an EPS Rating of 93 out of 99
Tyler’s earnings have grown by an average of just over 19% over the past three quarters. Analysts are predicting ongoing gains on this front. Full-year EPS is seen popping 14% in 2024 before accelerating to 27% growth next year.
Its stock price has swollen by a more than 47% so far this year. This is easily above the benchmark S&P 500’s lift.
Institutions have been net buyers of AVGO stock of late, with its Accumulation/Distribution Rating coming in at C+. Currently, 48% of its shares are held by funds, according to MarketSurge data.
Broadcom serves as an alternative artificial intelligence play for those who believe Nvidia (NVDA) is overvalued. It is a leader in custom chips that companies also need to implement all the power that AI brings to data centers, networks and even connected devices like smartphones.
Bernstein analyst Stacy Rasgon is rating AVGO as one of his top picks in the semiconductor sector. He said that, while, sentiment around AI chip stocks “has taken a pause,” that “demand clearly has not,” Rasgon said. He has a price target of 195 on Broadcom stock.
As if that wasn’t enough, Broadcom is on two different exclusive IBD lists, the Big Cap 20 as well as Tech Leaders.
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Sea Stock
E-commerce play Sea is breaking a downtrend and is also trading in the 5% buy zone above a consolidation buy point of 76.60.
This is a first-stage pattern. Such early stage bases are more likely to net big gains for investors. Its latest pattern was formed in just over one month.
Sea stock is above all its moving averages after finding support at the 21-day exponential moving average.
The stock’s relative strength line is just off recent highs. However it is starting to bend higher once again, an encouraging sign.
Overall performance is solid, but not ideal. This is reflected in Sea stock holding a strong IBD Composite Rating of 79 out of 99.
Earnings performance is currently the Achille’s heel for the firm, with its EPS Rating coming in at a poor 5 out of 99.
This is in stark contrast to its outstanding price price performance. Indeed, SE is among the top 4% of issues in terms of price performance over the past 12 months.
But Wall Street is expecting big improvements going forward. The firm turned in its first full-year profit in 2023, with EPS of 25 cents, and this year earnings are expected to surge 453%. Further growth of 90% is expected in 2025, according to MarketSurge data.
There has been more buying than selling of Sea stock among institutions of late. This is reflected in its Accumulation/Distribution Rating of B+. Overall ownership is solid, with funds owning 44% of the firm’s shares.
The lauded Harbor Disruptive Innovation Institutional Class Fund (HAMGX) is among the noteworthy holders. The Fidelity Contrafund also owns shares.
Singapore-based internet services company Sea’s holdings include the e-commerce focused Shopee, which services Southeast Asia and Taiwan. The company also owns digital-payments provider SeaMoney and Garena, a global online games developer.
Shopee is the largest business, contributing $9 billion out of Sea’s $13.1 billion in 2023 sales.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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