Best Stocks To Buy And Watch Now: 5 Top Stocks For October | Investor&039s Business Daily
Buying stocks is easy, but buying the right stocks without a proven strategy is incredibly difficult. So what are the best stocks to buy now or put on a watch list? eli lilly (lly), exxon mobil (xom), neurocrine biosciences (nbix), cardinal health (cah ) and the edge networks (anet) are the main candidates.
With inflation concerns high and the Federal Reserve aggressively tightening rates, market action has been challenging so far in 2022. The Russian invasion of Ukraine also continues to weigh on markets.
Reading: What to buy in stock market
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 best stocks right now to generate massive profits.
the can slim system offers clear guidelines on what to look 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 companies that are not yet profitable, often recent public offerings, that are generating tremendous revenue growth.
ibd’s can slim investment system has a proven track record of significantly outperforming the s&p 500. outperforming this industry benchmark is key to generating exceptional long-term returns.
Also, monitor the supply and demand of the stock itself, focus on the leading stocks in the major industry groups, and look for stocks with strong institutional backing.
Once you’ve found a stock that fits your criteria, it’s 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 buying point, ideally on high volume. In many cases, a stock reaches a suitable buying point when it breaks above the original high on the left side of the base. More information on what a basis is and how charts can be used to make big profits in the stock market can be found here.
don’t forget the m when buying shares
a key part of the can slim formula is the m, which stands for market. Most stocks, even the best ones, follow the direction of the market. invest when the stock market is in a confirmed uptrend and switch to cash when the stock market enters a correction.
A stock market rally that started in 2022 soon fell flat on its face. While the market rallied amid a better-than-expected earnings season, the latest uptrend flopped amid disappointing inflation data, which comes on the heels of Federal Reserve Chairman Jerome Powell’s aggressive speech. the s&p 500, the nasdaq and the dow jones industrial average have all sunk below their 50-day moving averages.
With the market in a correction again, now is the time to avoid making any further purchases. this will help prevent you from falling into a bear market trap. reversals can be particularly severe at this time. Instead, now is a good time to create a watch list of exceptional stocks like the IBD 50. These names will tend to have ascending lines of relative strength. the actions below are good candidates.
It’s a good time to consider making a profit. Also, stay on top of sell signals. any stock that drops 7% or 8% of its purchase price should be scrapped. Also watch out for sharp breaks below the 50-day or 10-week moving averages.
Remember, there is still significant headline risk. inflation remains a key theme, while the conflict between russia and ukraine is a wild card that has shown its ability to shake the market.
Things can change quickly when it comes to the stock market. be sure to keep an eye on the market trends page here.
best stocks to buy or watch
- eli lilly
- neurocrine biosciences
- cardinal health
- edge networks
now let’s look at eli lilly stock, exxon stock, neurocrine biosciences stock, cardinal health stock, and arista network stock in more detail. An important consideration is that all of these stocks have impressive relative strength.
eli lilly action
shares of lly are just below a flat-based buy zone after previously breaking above an ideal buying point of 335.43, according to marketsmith analysis.
Stocks have retaken the 50-day moving average, a bullish sign. the relative strength line has also reached new highs.
Eli Lilly shares have done very well in the stock market. in fact, it’s in the top 7% of stocks in terms of price performance over the past 12 months.
The diversified medical stock is also posting strong gains. it currently has an eps rating of 86 out of 99.
Analysts are especially interested in its drugs mounjaro and donanemab. lilly already has approval for mounjaro in patients with type 2 diabetes, but the company is also testing it in patients with obesity and related cardiovascular/metabolic conditions. Lilly is also working on Alzheimer’s with donanemab.
mounjaro is the first of his kind. it targets two hormones linked to blood sugar control. the Food and Drug Administration approved it for the treatment of diabetes in May.
“Mounjaro could be the biggest drug in history,” UBS analyst Colin Bristow said in a report on Thursday. He also sees lly stock as the “best way to play” the upcoming data from rival biogen (biib) in treating alzheimer’s disease.
bristow upgraded shares of lly to a buy on Thursday and raised his price target to 363 from 335.
It’s just one part of a suite of diabetes medications sold by Eli Lilly. mounjaro is becoming a more important part of the group. for the week ending in September. On January 16, Mounjaro prescriptions accounted for 22% of all Lilly’s diabetes medications, according to SVB Securities Analyst David Riser.
However, he also said that sales of trulicity, lly’s most popular diabetes treatment, continue to grow despite the initial strong uptake of mounjaro.
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In addition, UBS’s Bristow has called Lilly’s donanemab “the highest potential active for late-stage Alzheimer’s.” Lilly spokeswoman Kristen Basu said a phase 3 study aims to confirm donanemab’s benefits in mid-2023.
lilly appeared last week after biogen (biib) reported strong late-stage trial results for a similar Alzheimer’s drug.
exxon mobil shares are among the best stocks to buy or watch right now. has formed a consolidation pattern with an ideal buy point of 105.67, based on marketsmith analysis.
has retraced the 50-day moving average higher after finding support at the 200-day line. the relative strength line remains near new highs and bends up.
Exxon shares topped two different trend line entries last week. investors could also use 101.66 as an early entry. Investors may want to see a break in xom shares after a strong run, which would also allow the 50-day line to catch up.
xom shares have a very strong composite rating of 97. stock market performance is bullish, up 36% since the beginning of the year. The improvement in earnings performance lends further credence to a bullish outlook on Exxon Mobil shares.
Oil prices rose as the West turned away from Russian supply, topping $130 a barrel. But US crude oil futures recently plunged to almost $80, their lowest level since January. as recession fears mount, the cost of oil could come under renewed pressure.
OPEC and key allies agreed to heavy production cuts of 2 million barrels per day at last week’s OPEC+ meeting as they seek to support crude prices.
Crude oil futures soared last week, lifting xom and other oil stocks. exxon also issued a bullish update for the third quarter.
irving, texas-based exxon is diversified across much of the oil and gas spectrum. operations range from the exploration and production of crude oil and natural gas to the refining and marketing of fuels and petrochemicals. Exxon is one of the largest publicly traded companies in the energy sector.
That diversity can reduce volatility, but natural gas and gasoline prices have also dropped significantly.
exxon mobil earnings soared 276% to $4.14 per share in the second quarter. sales increased 70% to $115.7 billion. The largest oil company said this increase was mainly due to limited supply and high demand for oil, natural gas and refined products.
shares of nbix sit just below a flat base buy point of 109.36 after briefly topping entry last week.
the relative strength line has just reached a new high. shares of neurocrine biosciences previously recovered to just above their 10-week line, an encouraging sign. managed to hold above this key level after another test last week.
there are reasons for optimism. Firstly, biotech stocks are currently showing strength, with the industry group ranking fifth out of 197 groups tracked by ibd.
nbix shares are also performing well overall, highlighted by their very strong ibd composite rating of 96.
Earnings are solid, its eps rating is 81 out of 99, while it is in the top 7% of tracked stocks in terms of price performance over the last 12 months.
analysts expect earnings growth to pick up in 2023.
The company recently scrapped a high-profile treatment for essential tremor. Typically, a move like that would sink biotech stocks.
instead, shares of nbix rose. It has held onto most of those gains, even as Wall Street feels the pangs of a lower-than-expected jobs report and continued concern about rising interest rates.
Perhaps this is due to the fact that it has many other possible winners in the pipeline, according to analysts.
mizuho uy ear notes stock analyst neurocrine is also testing the same drug that failed to help patients with essential tremor in patients with a form of pediatric epilepsy. he expects the first test results from that effort this year. moreover, neurocrine is expected to ask us soon. Regulators approve ingrezza for Huntington’s disease patients with movement complications.
neurocrine also hopes to start studies in schizophrenia and an undisclosed illness this year. the company could also have trial results for treatments for depression and seizures as early as next year.
“Looking ahead to 2023, we see more room for optimism with top-line readings expected across multiple mid- and late-stage programs,” ear said in a report to clients. kept its neutral rating on nbix shares, but raised its price target from 95 to 98.
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wedbush analyst laura chico is looking at a drug called crincerfont. neurocrine is testing it in patients with an inherited disorder of the adrenal glands that affects growth and development. neurocrine is on track to release additional test data in 2023, she said in her note to clients.
During the June quarter, neurocrine’s largest earner, ingrezza, generated $350 million in net sales. Ingrezza treats an involuntary movement disorder called tardive dyskinesia. sales increased by a double-digit percentage and exceeded expectations.
neurocrine also sells a drug for Parkinson’s disease called ongentys and two women’s health drugs called abbvie (abbv).
cardinal health reserve
cardinal health has formed a new flat base with an ideal entry point of 72.38. this is a first stage pattern.
Stocks made some early gains in the past two weeks, bouncing off their 50-day/10-week line for the first time since a breakout in early August. however, after some minor pauses, investors could use 70.25 as an early entry. market conditions increase the risks of any purchase.
the rs line in particular is awesome for cah actions. overall, it has spiked upwards since early July and is recovering strongly after a brief decline.
Cardinal health has been attracting the attention of institutional investors lately. total. 55% of its shares are held by funds.
Highly rated holders include dfa ta us core equity fund 2 (dftcx) and sei institutional investment trust dynamic asset allocation fund (sdlax).
Overall performance is strong, with a composite rating of a healthy 90. Earnings aren’t ideal, but it ended a five-quarter period of declining earnings per share in the most recent quarter.
As a company within the highly defensive wholesale supply and drug industry, cah has been portrayed as a less volatile growth stock.
has been finding support after a high volume breakout from a cup base in August. The breakout marks the Cardinal’s best short-term action in years.
a weekly chart or monthly chart highlights how cah has been a stubborn laggard since early 2018. and the monthly chart shows that the stock broke a nearly 7-year downtrend on a magnificent monthly turnover in August.
The pharmaceutical segment of the company distributes brand-name and generic drugs. The medical segment manufactures medical, surgical, and laboratory products under the Cardinal Health brand. After five straight quarters of declining earnings, adjusted earnings in its latest reported quarter rose 36%, with revenue rising 11% to $47.1 billion.
It is a member of the prestigious ibd leaderboard list of the main stocks.
what to do if the rally attempt fails
edge network stock
Overall performance is excellent, with stocks having a perfect ibd composite rating of 99.
earnings have accelerated over the past three quarters, with a perfect 99 eps rating.
Arista’s biggest revenue growth driver has been high-end ethernet switches that speed communications behind the scenes of packaged computing servers in data centers.
Two of the company’s main clients have been microsoft (msft) and the metaplatforms (meta) parent company of facebook.
arista reported second quarter results on August 1. 1 that beat estimates on earnings and revenue. Arista’s earnings rose 59% from a year earlier to $1.08 per share, beating estimates of 92 cents.
In addition, revenue grew 49% to $1.05 billion versus forecasts of $979 million, breaking the $1 billion mark for the first time.
“In the second quarter of 2022, we achieved our first quarter of $1 billion in revenue, despite the challenges of an uncertain supply chain environment,” CEO Jayshree Ullal said in a press release. .
“This record-breaking milestone further validates the customer value of arista’s differentiated cloud networking platforms, now adopted by many of the world’s largest cloud and enterprise customers.”
In the third quarter, the company expects revenue in a range of $1.025 billion to $1.075 billion. anet stock analysts had forecast revenue of $996 million.
arista is the main stock in ibd’s computer networking industry group. it ranks ahead of digi international (dgii) and sierra wireless (swir) is third.