Best Stocks to Buy Now – 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? Amazon.com (AMZN), Netflix (NFLX), Domino’s Pizza (DPZ), Nvidia (NVDA) and AMD (AMD) are looking stronger as the stock market looks to bounce back from the severe coronavirus correction.
While the long bull market was finally slayed by the coronavirus crisis, things are again looking up. The stock market is once again in a confirmed uptrend. The rally has been strengthening, with the tech-heavy Nasdaq clearing key resistance levels and more top stocks breaking out.
Amazon stock, Nvidia stock, Netflix stock and Domino’s stock are among those recent breakouts. AMD stock cleared an aggressive entry as it races toward a conventional buy point.
A key to this is the improving news on Covid-19, both in the U.S. and around the world. Many states are now looking at how they are going to come out of lockdown and get their economies firing again.
So why are these five names above the rest to buy or watch? Before turning to that question it is important to consider how one goes about choosing a stock in the first place. Superior fundamentals and technical action, and buying at the right time, are all part of a shrewd investing formula.
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.
Invest in stocks with current 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.
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 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.
Best Stocks To Buy Or Watch
Now let’s look at Amazon stock, Netflix stock, Domino’s Pizza stock, Nvidia stock and AMD stock in more detail. An important consideration is that these stocks all boast impressive relative strength.
Even amid the current market turmoil, Amazon stock has managed to craft a cup base. Amazon stock is now in buy zone after clearing its 2,186.05 buy point, according to MarketSmith analysis.
Consumers are spending more of their time and money shopping online due to the coronavirus pandemic. This includes items that are out of stock at their local supermarket. Besides, state and local authorities want consumers to remain indoors as much as possible.
Amazon has been hiring during the coronavirus crisis. After already adding 100,000 workers last month, the e-commerce giant is now looking to hire an additional 75,000 workers to handle surging demand due to the coronavirus outbreak.
Amazon earnings rose 7% in Q4, defying views for another year-over-year drop after sliding 26% in Q3. The $6.47 a share annihilated views for $4.05. Revenue climbed 21% to $87.4 billion, also beating.
The cloud-computing business, Amazon Web Services, reported Q4 revenue growth of 34%, to $9.95 billion, also topping estimates. AWS is high margin vs. the fiercely competitive e-commerce business. Cloud-computing demand is rising amid the work-at-home surge.
The company said it ended the quarter with 150 million members of its Amazon Prime rewards program.
“The number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year,” Amazon CEO Jeff Bezos said in a news release.
The video streaming giant is seen as one of the winners as people are forced to stay at home during the coronavirus crisis. NFLX stock has been making a bullish upward move in recent sessions, MarketSmith analysis shows. NFLX stock on April 13 cleared multiple buy points, including a handle entry at 383.11 and a 393.62 entry above the top of its short base. On a long-term basis, one could view the short, V-shaped base as a handle on a consolidation going back to May 2019 or even June 2018. NFLX stock is just below its June 2018 peak.
The relative strength line for Netflix stock is encouraging. It has been making strong progress throughout 2020, and is close to hitting a new all-time high.
Netflix stock is also showing strong earnings and stock market performance. This has earned it a best-possible Composite Rating of 99. The Stock Checkup Tool shows earnings growth has been strong of late, with EPS swelling by an average 123% over the past three quarters. Growth has also been accelerating for the past two quarters, reaching 333% in the most recent period. Netflix stock is currently on the Leaders Watchlist.
Netflix app downloads were huge in March, reflecting the streaming service’s booming popularity around the world during the coronavirus pandemic.
Domino’s stock managed to hold up well in a tough overall market, and is now in buy zone after breaking out of a new cup with handle base with a 353.52 entry. It is now closing in on its breakaway gap-up buy point of 362, which came after a decisive earnings breakout.
A key indicator of DPZ’s stock strength is the RS line. It refused to buckle under the downward pressure, and is at all-time highs once again. This is a good sign for the stock now that the market has gone back into an uptrend.
The recent Stock Of The Day flew higher after Domino’s Pizza beat fourth-quarter forecasts and hiked its dividend despite a delivery war raging across the restaurant industry. Domino’s management said comparable sales for delivery were positive in Q4 and better than in the prior quarter.
In the coronavirus crisis, restaurants by choice or legal orders are shutting down or shifting to delivery only. But delivery is basically all of Domino’s business, so it has been benefiting. Meanwhile, many people who used to go out to eat might be ordering in. Domino’s Pizza is well-positioned to benefit or at least hold up well. Domino’s is rushing to add staff to meet pandemic demand.
At the end of March Domino’s pulled its full-year financial outlook due to the coronavirus pandemic. It also reported preliminary first quarter same-store sales that missed estimates. Shares held up OK following that news.
Even before the coronavirus crisis, Domino’s Pizza had been building more stores in popular areas, a “fortress” strategy to compete in delivery. The latest earnings report suggests that plan is working without cannibalizing sales at existing stores.
Domino’s stock has a strong Composite Rating of 87 out of a best-possible 99. DPZ stock’s performance had been weighing on the Composite Rating, but it is now a strength. The Stock Checkup Tool shows it boasts a healthy EPS Rating of 94.
Nvidia stock rebounded in late March and it has now broken out from a cup-with-handle base. The ideal buy point is 275.50. After managing to hold its 50-day line, NVDA stock is now well clear of this key technical benchmark.
MarketSmith analysis shows the graphics-chip specialist has been managing to outperform the broader market of late. Its RS line is around record highs.
Strong fundamental and technical performance has earned Nvidia stock a best-possible Composite Rating of 99. The Stock Checkup Tool shows recent earnings growth has been impressive. After several quarters of profit and revenue declines, Nvidia earnings swelled 136% in Q4 while sales leapt 41%. Over the past three quarters EPS has now grown by an average of 32%, above the 25% growth sought by CAN SLIM cognoscenti.
Nvidia CEO Jensen Huang said record revenue from sales of graphics processors for data centers fueled its better-than-expected results.
For the current quarter, Nvidia expects to generate sales of $3 billion, though it saw a $100 million hit to account for the coronavirus. It’s unclear if Nvidia still sees a limited coronavirus impact. Nvidia and other data center chipmakers, including AMD, are benefiting from huge internet demand during the crisis.
AMD stock has a cup base with a buy point of 59.37. Shares are racing toward that entry after clearing an aggressive entry just above 50 on Monday. AMD stock has climbed in five of the last six sessions.
Every day last week, AMD stock closed slightly above its 50-day line. It has managed to build on this by pulling further clear of this key technical benchmark. In addition, the RS line is moving up again after taking a brief breather. It has been rallying sharply over the last six months.
AMD stock also has a perfect Composite Rating of 99. After two quarters of declines, AMD earnings and sales have risen for the past two quarters. AMD earnings per share shot up 300% in the latest quarter with sales up 50%.
Its progress had been fueled by new products and improved profitability, both of which are key ingredients in the CAN SLIM formula.
The firm has won praise for making chips at 7-nanometer scale, while rival Intel (INTC)has struggled to make chips at 10-nanometer scale. AMD is now developing 5-nanometer chips. Circuit widths on chips are measured in nanometers, which are one-billionth of a meter.