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? Nvidia (NVDA), Coinbase Global (COIN), Toll Brothers (TOL), American Express (AXP) and TopBuild (BLD) are prime candidates.
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Techs Come Roaring Back, But Watch This Midcap Building Play
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 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 remains on solid footing. 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 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
- Nvidia
- Coinbase Global
- Toll Brothers
- American Express
- TopBuild
Now let’s look at Nvidia stock, Coinbase, Toll Brothers, American Express and TopBuild in more detail. An important consideration is that these best stocks to buy and watch all boast impressive relative strength.
Nvidia Stock
Nvidia is actionable as it rebounds off the 10-week moving average, MarketSurge analysis shows. It is actionable as much as 5% above this key benchmark, which currently sits at 121.55. A move above the 21-day exponential moving average could also be used as a buying trigger.
In addition, it could also be in the process of forming a double-bottom base with an ideal entry point of 136.15.
The AI stock’s relative strength line is off highs, but has been bending higher once again.
Overall performance is outstanding, with NVDA’s IBD Composite Rating coming in at a perfect 99.
The stock shines brightly on the technical front. Over the past 12 months, it is in the top 2% of issues in terms of price performance. So far in 2024, Nvidia stock has risen more than 149%.
Earnings are mighty, though this has led to a premium valuation for the stock. EPS has risen by an average 500% over the past three quarters. Earnings are seen rising 108% in 2024 before slowing to a still strong 37% in 2025.
Big Money has been a net seller of the stock of late, with its Accumulation/Distribution Rating coming in at D+. Nevertheless, 40% of the stock is currently held by funds, according to MarketSurge data, which reflects stout institutional backing.
Nvidia leads in artificial intelligence chips, but competition is rising. Key customer Microsoft (MSFT) is among firms developing their own solutions.
OpenAI, whose backers include Microsoft, reportedly is exploring its own AI chips as well.
Nvidia is not resting on its laurels amid rising demand. In March, at Nvidia’s GTC conference for artificial intelligence developers, the AI powerhouse announced a successor to the HGX H200 – the Blackwell platform.
Customers can also look forward to the next-generation B100 chip that analysts expect in coming quarters. B100 chips will have better performance and will likely have a higher average selling price.
Nvidia also entered into an agreement to buy Run.ai. for $700 million. Run.ai helps developers use AI tools more efficiently and reveals Nvidia’s road map and priorities. Run.ai works with Nvidia’s Cloud AI product that helps businesses get “instant access to an AI supercomputer from a browser.” The deal is currently under regulatory review.
Coinbase Stock
The cryptocurrency exchange stock has cleared a trendline entry, with the short-term high of 255.90 acting as the ideal entry point. Additionally, 263.80 could serve as an early entry for aggressive investors.
Investors could choose to wait for it to clear a consolidation pattern entry of 283.48, though it could also be easier to get shaken out of the stock with a higher buy price.
The stock found support near its 50-day moving average and has now rallied clear of the benchmark. It has also cleared its shorter-term moving averages.
Strong overall performance is reflected in COIN’s best-possible IBD Composite Rating of 99. Coinbase stock has popped more than 52% so far this year.
Earnings performance is not ideal, with the EPS Rating sitting at 81 out of 99. But Wall Street expects much better things, with EPS seen rising 1,809% in 2024.
Performance is already showing signs of improvement. Earnings have grown an average 545% over the past three quarters. This is well clear of the 25% growth sought by Investor’s Business Daily.
The cryptocurrency exchange play currently sits at the summit of the competitive Computer Software-Financial industry group.
Institutional investors have been snapping up Coinbase stock lately, with its Accumulation/Distribution Rating coming in at B.
Overall ownership is still relatively low though, with big funds holding 29% of shares. However, fund ownership has risen for the past four quarters in a row. The acclaimed Fidelity Contrafund is a noteworthy holder.
Coinbase stock rallied with the crypto markets as former President Donald Trump’s reelection odds jumped following an assassination attempt at a July 13 rally. Digital assets were also boosted by the nomination of crypto-friendly Sen. J.D. Vance, R-Ohio, for vice president.
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Toll Brothers Stock
Shares have formed a cup base with an ideal buy point of 135.37. It is actionable as high as 142.14. Homebuilders have been showing more strength of late.
The stock has been moving bullishly in recent sessions, reclaiming its 50-day moving average after rallying from consolidation lows. This is in addition to clearing its short-term moving averages.
The relative strength line sits off recent highs, but is spiking sharply. The recent RS line decline followed a solid uptrend, and gave it a chance to consolidate.
TOL stock has rallied more than 30% so far in 2024. This means it is comfortably outperforming the benchmark S&P 500. It is up over 16% in the past four weeks alone.
Toll Brothers is also in the top 7% of issues in terms of price performance over the past 12 months.
The stock holds a strong Composite Rating of 94. Earnings are a key driver for the homebuilder, with TOL stock holding an EPS Rating of 97 out of a best-possible 99.
In total, 58% of Toll Brothers stock is held by funds, according to MarketSurge data. An additional 2% is held by management. Funds have been net buyers of the stock of late.
Earnings are seen rising 15% in 2024, though profits are expected to be flat next year.
Toll Brothers is a luxury homebuilder. Back in May, the firm revised its full fiscal year delivery guidance higher. The company predicts deliveries of 10,400 to 10,800 homes with an average price of $960,000 to $970,000. Toll Brothers is projecting EPS of $14.
For Q3, the homebuilder forecasts 2,750 to 2,850 home deliveries with an average price of $950,000 to $960,000.
American Express Stock
Payments stock American Express is in a buy zone after clearing a flat base entry of 244.41. This is an early-stage base, which means it is more likely to net big gains.
The Dow Jones giant is less than 4% above its 50-day line and got bullish support at the 21-day exponential moving average Friday after it undercut the buy point.
American Express has a strong IBD Composite Rating of 94 out of 99. Earnings are its strongest suit, with its EPS Rating sitting at 95.
Further progress is expected. Wall Street analysts expect earnings to grow 19% in 2024 and by a further 11% next year.
American Express has seen its stock price swell by nearly 31% so far this year. This is a comfortably better gain than the benchmark S&P 500’s.
Institutions have been net sellers of the stock of late, with its Accumulation/Distribution Rating coming in at D+. In total, 44% of its stock is held by funds, according to MarketSurge data.
AXP has been seeing fund ownership rise for the past three quarters. Fidelity Contrafund has also been raising its stake for the past three quarters.
Last Friday, American Express reported better-than-expected Q2 earnings. EPS popped 44% to $4.15. However, revenue of $18.4 billion was light, despite revenue from card fees topping $2 billion for the first time.
The company hiked its full-year EPS forecast to $13.30 to $13.80 from the prior $12.65 to $13.15. AmEx held the revenue-growth outlook of 9% to 11%.
CFO Christophe Le Caillec boasted to MarketWatch about the firm acquiring 3.3 million new cardholders during the quarter.
“That’s the very reason why we want to keep investing in marketing,” he said. “We want to keep this flywheel going and acquire more and more customers.”
CFRA analyst Alexander Yokum is rating American Express stock as a buy with a 295 target.
“Our Buy opinion reflects best-in-class execution. We view the payments industry as highly attractive as it comes with a revenue CAGR of 7%-8%,” he said in a July 20 research note. “Additionally, AXP is positioned to outperform the industry given its success with younger cohorts as these customers tend to grow their spending at an elevated rate, use Amex cards at a higher frequency than older generations, and are more digitally engaged.”
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TopBuild Stock
Building products supplier TopBuild is flirting with a consolidation pattern buy point of 452.87. This is a third-stage pattern, which counts as midstage.
BLD stock has rallied clear of its short-term and its 50-day moving averages, an encouraging sign for a breakout attempt.
The stock’s relative strength line is also bending sharply higher, though it remains below 12-month highs.
Overall performance is strong, with BLD stock holding an IBD Composite Rating of 90 out of 99.
Earnings performance is the biggest feather in its cap, with its EPS Rating coming in at 93. Additionally, it is in the top 7% of issues in terms of price performance over the past 12 months.
The firm has seen earnings rise an average 10% over the past three quarters, which is not ideal. However its three-year EPS growth rate comes in at a solid 25%.
Wall Street expects earnings to rise 11% in 2024 before slowing to 6% growth in 2025.
Big Money has been snapping up the stock of late. This is reflected in its Accumulation/Distribution Rating of B-. This is on top of high ownership already, with funds owning 74% of the firm’s shares.
The lauded Columbia Acorn Fund (ACRNX) is among the noteworthy holders.
Back in May, TopBuild raised its 2024 revenue outlook to $5.4 billion-$5.6 billion, up from its previous expectation of $5.36 billion-$5.56 billion. In addition, the company reported that its board had authorized repurchasing up to $1 billion in outstanding shares. The new authorization is in addition to the $154 million remaining from its previous buyback program.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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