Finance
These Are The 5 Best Stocks To Buy And Watch Now In August
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? Samsara (IOT), Tenet Healthcare (THC), NextEra Energy (NEE), Tyson Foods (TSN) and W.R. Berkley (WRB) are prime candidates.
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This Consumer Giant’s Earnings Could Give Clues About Health Of Economy
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. However, a recent negative jobs report has shaken confidence.
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 last week’s jobs report spooked investors, with fears rising that the Fed may have taken too long to cut rates. They remain firmly below the important technical benchmark.
The stock market is in a correction after coming under broad pressure. Now is a time to be extra cautious about 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
- Samsara
- Tenet Healthcare
- NextEra Energy
- Tyson Foods
- W.R. Berkley
Now let’s look at Samsara stock, Tenet Healthcare, NextEra Energy, 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.
Samsara Stock
Artificial intelligence play Samsara is eyeing a cup-with-handle entry of 39.21, MarketSurge analysis shows. This is a first-stage pattern, a positive.
The stock has been getting support after making tests of the important 50-day moving average. This is an encouraging sign.
The stock’s relative strength line has also been charging higher on its weekly chart, though it’s below the 52-week high set in May.
Overall performance is strong, but not ideal, which is reflected in IOT’s IBD Composite Rating of 85 out of 99.
The stock has been solid on the technical front. Over the past 12 months, it’s in the top 10% of issues in terms of price performance. So far in 2024, IOT stock has gained nearly 15%, which is better than the benchmark S&P 500.
Earnings performance has been solid, with Samsara stock’s EPS Rating sitting at 81 out of 99. Improving performance is reflected in the fact earnings per share have risen by an average of 283% over the past three quarters.
Wall Street expects stout ongoing growth. Full-year EPS is seen rising 91% in fiscal 2025 before rising a further 72% in 2026.
Big Money has been a net seller of the stock of late, a negative. Its Accumulation/Distribution Rating comes in at D, though the up/down volume ratio is a slightly positive 1.1.
In total, 47% of the stock is currently held by funds, according to MarketSurge data, which reflects good institutional backing. The highly regarded Harbor Disruptive Innovation Fund (HAMGX) is a noteworthy stockholder.
Samsara’s platform is focused on utilizing the Internet of Things and cloud-based software to allow industrial and infrastructure companies to monitor their operations for efficiency and safety.
It uses AI and other tools to offer insights from vast sets of data. The company sees a big opportunity ahead as many industrial sectors are early in digitizing their operations.
The San Francisco-based company will report results for its July-ended second quarter on Sept. 5. Shares have proved volatile in the past following earnings results, including a 12% drop following Samsara’s Q1 report in June and 14% jump after it reported fiscal fourth-quarter results in March.
An approach highlighted by Investor’s Business Daily is to use options as a strategy to reduce risk around earnings. It’s a way to capitalize on the upside potential of a stock’s move around earnings, while reducing the downside risk.
Tenet Healthcare Stock
The health care stock is in the 5% actionable zone from an adjusted buy point of 147.
It staged a bullish upside reversal on Aug. 5 after getting support below the 50-day moving average, taking it back above the conventional flat-base entry of 142.35.
Strong overall performance is reflected in THC’s impressive IBD Composite Rating of 97. Tenet Healthcare stock has spiked 99% so far this year.
Earnings performance is very strong for the hospital stock, netting it an EPS Rating of 97 out of 99. But Wall Street expects further improvement in 2024, with full-year EPS seen rising 50%.
Performance is already strong. Earnings have grown an average 75% over the past three quarters. This is well clear of the 25% growth sought by Investor’s Business Daily.
THC stock is displaying leadership, with shares currently siting at the summit of the competitive Medical-Hospitals industry group.
Institutional investors have been snapping up Tenet stock lately, with its Accumulation/Distribution Rating coming in at B+. This is on top of already high overall ownership, with big funds holding 69% of shares. Indeed, fund ownership has risen for the past two quarters in a row. The acclaimed Fidelity Contrafund (FCNTX) is a holder.
And while rising surgery bills may not be the best news for patients, they are proving to be a boon for Tenet Healthcare investors.
Dallas-based Tenet gave investors plenty of reasons to break out the bubbly when it posted earnings on July 23. EPS popped 60% to $2.31, topping analyst estimates. Revenue rose less than 1% to $5.1 billion, better than views for about $5 billion.
Same-facility surgical revenue grew 7.1% from the same quarter a year ago. That came as the number of cases rose just 0.2%, with revenue per case rising 6.8%. Tenet attributed the jump in per-case revenue to “higher acuity associated with favorable case mix as well as favorable payer mix.”
It’s also helpful that Tenet rivals HCA Healthcare (HCA) and Universal Health (UHS) jumped above buy points on their recent earnings reports.
Looking For The Next Big Stock Market Winners? Start With These 3 Steps
NextEra Energy Stock
NEE stock has formed a flat base with an ideal buy point of 80.47, MarketSurge analysis shows. The energy stock just tested the entry on Aug. 2 before slipping under it amid the broader malaise. This is a first-stage pattern, a bonus.
The stock has been showing bullish action of late. It reclaimed its 50-day moving average after rallying from recent lows and is also clear of its short-term moving averages.
The relative strength line sits off 12-month highs but has spiked. The RS line declined during the consolidation period but is bouncing back with aplomb.
NEE is one of the more impressive issues in the stock market shrubbery in 2024, rising nearly 28% so far this year. This means it is comfortably outperforming the S&P 500.
The utility play is also in the top 12% of issues in terms of price performance over the past 12 months.
The stock holds a very strong IBD Composite Rating of 96. Earnings performance is also solid, with NEE stock holding an EPS Rating of 85 out of a best-possible 99.
In total, 43% of the energy stock is held by funds, according to MarketSurge data. An additional 1% is held by management. Institutions have been net buyers of NextEra stock of late. Funds who say NEE is a good investment include the famed Franklin Growth Fund (FKGRX).
Wall Street expects ongoing earnings growth at the firm. Full-year EPS is seen growing 8% to $3.41 in 2024 before popping a further 8% next year.
NextEra stock is not just a price appreciation play. It also pays out a healthy dividend, with its yield coming in at 2.7%. This is about double the S&P 500 average.
The Florida-based large-scale renewable energy developer is benefiting from rising power demand due to artificial intelligence. Data centers account for 18% of its gigawatt backlog, according to NextEra. NEE also reported that it signed a deal for 860 megawatts with Alphabet‘s (GOOGL) Google in Q2.
Top hyperscalers — the largest cloud, data center and artificial intelligence providers — also include Amazon.com’s AWS and Microsoft (MSFT).
Tyson Foods Stock
The food stock is near a buy zone after testing 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 nearly 10% 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 remains near recent highs.
Tyson Foods has a strong but not ideal IBD Composite Rating of 91 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 109% in 2024 before flying a further 32% next year.
Its stock price has swollen by nearly 15% so far this year. This is a better gain than the benchmark S&P 500’s and hints at rising enthusiasm.
Institutions have 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 Monday 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 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.
These Stocks Eye Entries As Market Rally Sets Up
W.R. Berkley Stock
While the stock market as a whole has endured a rainy day of late, insurance stock WRB is looking bullish. It has formed a flat base, which can also be interpreted as a saucer base, with an ideal buy point of 59.46. It is actionable as high as 62.43.
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 above an early entry of 56.66.
The stock’s relative strength line is also spiking higher, though it remains off 12-month highs. More progress here could aid a breakout attempt.
Overall performance is excellent, with WRB stock holding a near-perfect IBD Composite Rating of 97 out of 99.
Earnings performance is a key driver for the firm, with its EPS Rating coming in at 98 out of 99. Price performance is no slouch either, with the stock among the top 14% 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 its 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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