It is hard to follow the recent stock market movements. The Fed is taking steps to fight inflation at levels not seen in more than 40 years, and most financial experts say a recession is likely in the near future.
Of course, the market is reacting. The S&P 500 Index is down more than 21% year-over-year, while the Dow Jones Industrial Average and Nasdaq Composite are down more than 16% and 30%, respectively.
This is the best stock to buy. Important stuff.
Remember, there are thousands of stocks traded on the NYSE and Nasdaq. But you want to find the best stocks now to make huge profits.
CAN SLIM provides clear instructions on what to look out for. Invest in stocks with recent quarterly and annual revenue growth of more than 25%. Find companies with new products and services that will change the way you plan. Also consider loss-making companies (often recent IPOs) that are generating huge revenue growth.
IBD’s CAN SLIM Investment System has a track record that far exceeds the S &P 500 Index. Reaching this industry benchmark is critical to generating exceptional returns over the long term.
Asbury Automotive Group Inc. (ABG).
Asbury Automotive Group operates more than 140 dealerships in 15 states and also offers third-party auto loans and insurance products.
ABG currently trades about 35% below its record high in 2021. The market crash in early 2020 drove the stock price down nearly 70%, but the withdrawal of more than 25% provided a good long-term entry point to buy the historic decline.
Asbury has increased net earnings per share (EPS) and revenue each year since 2016, with three years of average annual growth of 53.6% and 22.6%, respectively. Analysts expect an average annual EPS growth rate of 18.5% over the next five years.
Ford Motor Company.
Like everywhere else on Wall Street, Ford has had a tough year. Shares of these automakers have more than halved over the course of 2022. Meanwhile, Ford faced pandemic headwinds, semiconductor shortages, high inflationary costs and supply chain problems. Things were further complicated by the fact that the stock continued to decline when management announced that third-quarter earnings may be down slightly. Specifically, more than 45,000 cars are expected to be underbuilt and unable to be sold in the current quarter due to a shortage of parts.
The recent decline may have turned an already attractive stock into one of the best to buy today. At least Ford is currently trading at a sales-to-share ratio of 4.45 times. For the auto industry as a whole, Ford’s stock price ratio of 9.23 times looks pretty valuable.
Ford’s valuation is an important reason why investors today should consider adding car company stock to their portfolios. For no other reason than that Ford is the industry leader in trading at a discount to its peers. More importantly, however, despite the stock’s poor performance, there are plenty of reasons for investors to be optimistic.
Devon Energy Company (NYSE: DVN).
Devon Energy is a revenue investor’s dream. The company is the highest paying dividend stock in the S&P 500. Devon Energy is an oil and gas company with a long history of outstanding performance, and after rising more than 80% over the past year, the stock price is expected to remain strong.
Veteran income investors might think that “DVN is only paying dividends because oil and gas prices are skyrocketing.” But that’s not the case. The company has consistently paid high dividends to investors for the past 29 years, even despite falling oil and gas prices.
It has a strong balance sheet and an impressive credit rating. Even when the oil and gas industry isn’t so hot, companies can take advantage of the money they need to pay dividends.
Eli Lilly Stock.
According to Marketsmith analysis, LLY stock is just below its flat base buy zone after removing its earlier ideal buy point of 335.43.
The stock has regained its 50-day moving average, which is a sign of growth. Because of current market conditions, buying now would be a very aggressive move.
Eli Lilly stock is trading very well in the stock market. In fact, it is in the top 5% of stocks in terms of price performance over the past 12 months.
Diversified Healthcare Providers also boasts solid earnings. It currently has an EPS rating of 85 out of 99.
Analysts are particularly interested in its drugs Munyaro and Donanemab. Lily is already approved for use by type 2 diabetics. But the company is also testing it on patients with cardiovascular/metabolic diseases related to obesity. Lily is also working with Donamap on Alzheimer’s disease.
Builders First Source, Inc.(BLDR)
Builders First Source manufactures building materials such as floor and roof trusses, engineered wood, windows and wall panels. They also provide installation and construction services.
BLDR stock currently trades 40% below its 2022 record highs, but has risen 204% in the last five years. Over the last 10 years, a decline of more than 30% has provided a good entry opportunity. Note that the stock has fallen more than 50% several times over this period before recovering.
Builders Firstsource has increased earnings per share and revenue every year since 2016, with three-year average annual growth of 94.9% and 44.9%, respectively. Analysts expect an average annual EPS growth rate of 18.8% over the next five years.
BLDR’s current P/E ratio is 3.6, which is the lowest it has been in five years. P/E levels range from 3.6 to 60.9. A forward P/E of 6.6 is also attractive at the lower end of the historical range.
Alphabet Co., Ltd.
It would be easy to argue that Alphabet is not only one of the best stocks to buy at the moment, but also the best individual stock to buy in today’s market. Of course, different investment strategies require different types of stocks, and there is no universal way to objectively put one company at the top of every investor’s wish list, but Alphabet is in almost every conversation. At least Alphabet is one of the most prosperous companies on Wall Street, and it has a secular tailwind.
Perhaps more importantly, the company’s attractive valuation and net worth should ensure that it can thrive whether there is a recession or not. In fact, Alphabet didn’t even mention the words “recession” or “slow” in its recent earnings report. This is an important distinction to make when the Fed is literally trying to slow the economy to fight inflation.
Alphabet may not be worried about a depression, but that’s what investors are looking at. After all, tech stocks tend to sell off when interest rates rise. So far, the high-tech Nasdaq has sold off about 38% because higher indiscriminate borrowing costs will cut into the future profits of loss-making companies. Unfortunately, Alphabet was able to avoid a sell-off despite being as close to a perfect balance sheet as possible. As a result, Alphabet’s sales are now down about 27% year over year.
Meta Platforms Inc (NASDAQ: META).
Meta Platforms (formerly Facebook) is the most popular stock on Wall Street and the fourth most popular in ETF portfolios. But the past year has been a tough time. Even though it might make most investors run, it’s actually an opportunity.
Meta is a growing stock in almost every way. The company’s revenue has been growing steadily for years, and up until the last earnings report, the growth in net income per share (EPS) was impressive. In addition, the stock was known for tremendous price gains until the rug was pulled from the technology sector earlier this year due to inflation concerns.
This decline has created an often unseen opportunity – growth stocks that can throw valuable investors off. Meta’s P/E ratio is about 12 and the S&P 500’s P/E ratio is over 19. The profit/loss ratio on these stocks is also at its lowest level in five years.