Whether you are a seasoned investor or a beginner, finding strategy-proven stocks at the right time is fundamental to the growth of your investment. However, making a sound watchlist from thousands of profitable stocks to buy can be quite overwhelming. Investors would have to consider not only the long-term performance of a stock but also evaluate various crucial ingredients that influence its growth. So, what are the best shares to add to your watchlist? Read on for insights.
The Coronavirus Bear Market
The recently experienced coronavirus bear market has seen the stock market hit an all-time high, with the public and private sectors putting more effort to revamp the economy. This action displays signs of a quick and holistic recovery of the economy from the effects of the pandemic.
While vaccinations are building up steadily, coronavirus is still a concern. This explains the unpredictable market movements as expressed by the recent mix-up in economic data. For example, President Joe Biden has launched a $2 trillion plan aimed at reshaping the economy by upgrading the country’s infrastructure. According to President Biden, the plan is a “Once in a generation investment in America.” Biden’s proposal combines both spending and tax increases.
On the other hand, in April, the nation’s Consumer Price Index (CPI) climbed with the highest percentage since 2009, triggering a heavy sell-off in the stock market. While all indications point to a resilient moment behind the stock market, investors will have to look out for further signs in the long run.
Key Ingredients for Buying Stocks
Before picking the best growth stocks for your portfolio, it is primarily crucial to know how investors go about identifying a security. Essentially, technical and fundamental methods of stock analysis and timely buying will come in handy as your top-of-the-list tactics for investing. The CAN SLIM Investing System highlights ingredients necessary for choosing the best stock from unlimited options listed on the various stock exchanges. Simply said, the CAN SLIM System is a set of investment guidance on the rules and factors you should be looking out for.
- C for Current Quarterly Earnings
Consider investing in companies with current quarterly earnings exceeding 25%. The higher the recent earnings-per-share (EPS), the better the equity.
- A for Annual Earnings
Like the current quarterly earnings, investors should consider equities with yearly EPS exceeding 25% for the past 3 to 5 years.
- N for New Products, Services, Management, and Events
Look for companies offering new services and products, especially those that push an individual stock to new highs. In most cases, news about the launch of a new product or service tends to trigger short-term excitement in the market, resulting in the appreciation of stock prices. Also, consider companies that have recently gone public but are generating outstanding gains in revenue.
- S for Supply Scarcity
The scarce supply of equities tends to bolster market demand, creating an uprise in share prices. Therefore, choosing companies that are repurchasing their equities gives you instant access to securities with high gains and yields.
- L for Laggard Stocks
According to Goldman Sachs, investing in laggard securities has been proven to beat the market. These are underperforming equities with low performance and reduced average yields compared to their peers.
- I for Institutional Support
Investors should look for securities with strong institutional support from companies ranked as above-average performers. The idea is to add the best options from top-performing stock lists to your portfolio before the institutional funds are fully invested.
- M for Market Direction
As determined by the daily market averages, the market direction is crucial in influencing the price levels of the securities market. Typically, most equities will follow the direction of the market. As a result, investors will buy securities when there is a market uptrend and sell when there is a confirmed downtrend.
Finding a stock that meets the CAN SLIM strategy means that you are in the best position to enter the market. Consequently, you can create a watchlist of strong securities while integrating crucial buying points. Get access to our exclusive stock lists and other powerful tools for trading by joining Tixee.
The Best Stocks to Buy
Here is a list of fundamentally strong stocks to add to your watchlist.
Following the release of the company’s 1st Quarter Earnings for 2021, it is clear why Facebook is such an appealing option to investors. The report indicates a rise in the equity prices by over 6% during the after hours trading. “We had a strong quarter,” stated Zuckerberg, “As we helped people stay connected and businesses grow.”
Currently, the Facebook stock has gained more than the S&P 500 and the Dow Jones indices. The IBD analysis expresses a Composite Rating of 94, indicating a strong performance in Facebook’s earnings. The company also has its earnings grow by an average above 50%, which exceeds the 25% recommended by the CAN SLIM System.
Notably, Facebook reports over 1.88 billion active users globally, who spend hours each day on the platform, contributing to the year-over-year growth in the company’s total revenue. Also, Facebook owns giant social media platforms, Instagram and WhatsApp, raising its following to over 2.8 billion active users. According to Abc’s Action News, this is an 8% increase in the user base, since 2020.
Google’s parent company, Alphabet, has reclaimed its status as one of the platforms within the market’s Buy Zone. This follows the recovery above 50-day moving average. For the past three quarters, GOOGL has grown its earnings by over 50%, exceeding the 25% rating sought by the CANSLIM system by double. GOOGL stock has grown steadily through 2021, with its performance expected to climb by over 9% in 2022.
The first-quarter report came as a surprise to analysts, as the YouTube Ads revenue exceeded expectations. According to IBD Digital, GOOGL has a Composite Rating of 93.
Goldman Sachs (GS)
Following its break out from the cup base, Goldman Sachs returns to the Buy Zone once again. In addition to holding a Composite Rating of 98, the company has a reputation for having an incredible stock market performance. Also, recently, Goldman Sachs has had its earnings skyrocket progressively at the Dow Jones.
The GS stock is still an outstanding value stock. While the security remains undervalued, GS has managed to rise by over 23% in value in 2021. The company’s investment banking revenue has also risen to a historical record of $3.77 billion.
Cimarex Energy Stock (XEC)
Since 2020, the XEC stock saw its value decline by over 50%. Its 50-day moving average has reinstated the XEC stock to the Buy Zone. Today, Cimarex has a Relative Strength (RS) rating of 95 and a Composite Rating of 98, placing the stock in the top 5% securities by market performance.
The stock also has big money rally behind it, with a “B+” in Accumulation/Distribution Rating. One of the reasons Cimarex is an appealing option to investors is its independence as an oil and gas company. This means that the XEC stock has been minutely impacted by President Biden’s order to suspend oil and gas leasing on federal waters and land. Again, Cimarex has a wide range of options in the industry.
How to Buy a Stock
Investing in the stock market is probably the most basic way to get your hands on the trading experience. But, where do you start? Generally, to buy securities from a company, you will need a licensed stockbroker who is legally authorised to undertake the transactions on your behalf.
There are two basic types of online brokers today. They include full-service brokers and discount brokers. In addition to providing you with a wide range of brokerage services, full-service brokers are also known for offering financial advice on investing. On the other hand, discount brokers provide you with the necessary tools to run your own transactions. Most discount traders also offer advice on how to invest through automated Robo-adviser technology.
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Join Tixee Today
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Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.
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