Buying a stock is deceptively easy, but purchasing the right stock at the right time without a proven strategy is incredibly hard. So, what are the best Robinhood stocks to buy now or put on a watchlist? At the moment, Google parent General Electric (GE), Amazon (AMZN) and Visa (V) are standout performers, at least relatively.
Best Robinhood Stocks To Buy: The Crucial Ingredients
There are thousands of stocks trading on the NYSE and Nasdaq. But to generate big gains you have to find the very best. The best Robinhood stocks for investors will be those that offer a mix of earnings and stock market performance.
The CAN SLIM system 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.
The Market Is Key When Buying Robinhood Stocks
A key part of the CAN SLIM formula is the M, which stands for 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.
While a stock market rally that kicked off 2022 soon fell on its face, it has turned in stunning gains so far this year. Indexes have also shaken off recent negative action to push higher again, with the Nasdaq and the S&P 500 now back above the key 50-day moving average.
The stock market is back in a confirmed uptrend. This is the best time to be in stocks, either by establishing new positions or to by adding to existing holdings at follow-on opportunities. Investors should be looking of exceptional stocks, such as those in the IBD 50. The stocks below are near buy points and are possible candidates.
Despite this 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 averages. It is a good time to be raising cash – start by selling your weakest performing stocks first.
Remember, there is still significant headline risk. Inflation remains a key issue while the Russia-Ukraine conflict is a wild card that has proved its ability to shake the market.
Things can quickly change when it comes to the stock market. Make sure you keep a close eye on the market trend page here.
Best Robinhood Stocks To Buy Or Watch
Now let’s look at GE stock, Amazon stock and Visa stock in more detail. An important consideration is that these stocks are solid from a fundamentals perspective, while institutional ownership is also strong. They are also part of the Robinhood Top 100 Stocks, the platform’s most popular stocks among traders.
GE stock is forming a flat base with an ideal buy point of 117.96, MarketSmith analysis shows. This is the first base to emerge for the strong market performer since January. Investors could use 115.85 as an early entry.
The latest pattern is a second-stage base. This counts as early stage, which means it is more likely to net big gains for investors.
General Electric stock is currently in the top 4% of stocks in terms of price performance over the past 12 months. It has gained more than 72% in 2023, reaching a five-year-plus high in the process.
GE stock has been on a tear since breaking out from a cup-with-handle base in late January. Analysts have called GE one of the better defensive moves for investors amid an uncertain macroeconomic environment.
Overall excellent performance is reflected in its IBD Composite Rating of 92 out of 99. At the moment earnings are the Achille’s heel, with its EPS Rating coming in at 76 out of 99.
Analysts forecast EPS growing 104% in Q3 to 55 cents per share. Full year earnings are seen rising 20% in 2023 and 83% in 2024.
The aerospace segment — sometimes called GE’s “crown jewel” — makes jet engines and aviation systems for plane makers including Dow Jones giant Boeing (BA). GE Aerospace also runs a lucrative aftermarket business for engine repair and maintenance.
The stock has been soaring amid moves to narrow the focus of the sprawling conglomerate.
Earlier this year the firm spun off, GE HealthCare Technologies (GEHC). It is part of a three-way breakup for General Electric.
It is splitting into independent energy, health care and aviation companies. Prior to that, it shed a series of assets, from lighting to locomotives.
Amazon stock is just below a 146.63 handle entry. A bounce over a recent high of 141.28 would work as early entry.
The relative strength line had been making a powerful run higher since early march, though it is currently taking a breather.
Overall performance is top notch, with its IBD Composite Rating currently coming in at 94 out of 99.
At the moment earnings are lagging stock market performance, but they are improving. It now holds an EPS Rating of 81 out of 99.
Institutional investors have been snapping up the stock of late, with its Accumulation/Distribution Rating coming in at A-. In total, 38% of shares are held by funds with a further 12% being held by management.
Amazon stock was given a boost after it earned 65 cents a share on sales of $134.4 billion in the June quarter, topping analyst views for both metrics. In the year-earlier period, Amazon lost 20 cents a share on sales of $121.2 billion.
It also served up sunny guidance for the current quarter. It forecast operating income of $7 billion on sales of $140.5 billion, based on the midpoint of its guidance. Analysts had been calling for operating income of $5.5 billion on sales of $138.3 billion.
The company’s cloud computing unit, Amazon Web Services, saw revenue increase 12% year over year to $22.1 billion in the second quarter. That was slower than the 16% growth in the first quarter, but topped estimates for 10% growth. Also, Amazon executives said AWS sales have stabilized.
“It was another strong quarter of progress for Amazon. We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded, “CEO Andy Jassy said in a news release. “Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment.”
He also said what seem to be the magic words in the current stock market environment – AI, or artificial intelligence.
“AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases that make it much easier and more cost-effective for companies to train and run models (Trainium and Inferentia chips), customize Large Language Models to build generative AI applications and agents (Bedrock), and write code much more efficiently with CodeWhisperer,” he said.
Jassy told analysts during the post-earnings conference that call he sees generative AI driving growth for AWS.
Wall Street analysts cheered the firms most recent report. Rosenblatt Securities analyst Barton Crockett upgraded Amazon stock to buy from neutral. He also raised his price target to 184 from 111.
“As the business resets, with efficiency a new focus for retail, and AI an emerging driver in cloud, the risk of impending economic headwinds looks less worrying, opening the door to higher multiple consumer growth stories,” he said in research note.
UBS analyst Lloyd Walmsley reiterated his buy rating on Amazon stock and raised his price target to 175 from 150. He called Amazon’s second-quarter results “an inflection quarter” and sees improving growth on the top and bottom lines ahead.
The payment processor stock is actionable after clearing a flat base official buy point of 245.37. This is part of a rare, bullish base-on-base formation.
The relative strength line is moving higher again recently but has work to do to reclaim recent highs.
All-around performance here is strong, with its IBD Composite Rating coming in at 93 out of 99.
Earnings growth is sturdy, if not ideal, with EPS rising by an average of 15.4% over the past three quarters.
Gains are seen trending steadily higher. EPS is expected to climb 16% in 2023 before rising an additional 14% in 2024
Institutional investors have been net buyers of the stock of late, with its Accumulation/Distribution Rating coming in at B-. In total, 51% of its stock is currently held by funds with a further 2% being held by banks.
In the most recent quarter Visa earnings rose 9% to $2.16 per share on 12% revenue growth to $8.1 billion, topping analyst views. A resilient U.S. consumer and strong travel trends worldwide are fueling transaction growth.
Payments volume increased 9% for the quarter while cross-border volume vaulted 17%.
Service fee revenues rose 15% to $3.66 billion, topping expectations of $3.63 billion. Data processing fees also rose 15% to $4.1 billion, beating FactSet estimates of a 10.8% gain. International transaction revenue swung 14% higher to $2.92 billion, but fell short of forecasts of $3.01 billion.
The credit card giant looks to have emerged unscathed from the recent banking crisis sparked by the failure of Silicon Valley Bank. The event sent shock waves through financial markets, with midsize banks bearing the brunt of losses during the March mayhem.
The key point here for investors is that payment processors Visa and Mastercard do not carry card balances on their books. This is in contrast to American Express and Discover Financial (DFS).
Instead it is the issuing banks such as JPMorgan Chase (JPM) and Wells Fargo (WFC) that carry the upside and downside on the provision of credit. Visa and Mastercard make money on credit and debit card transaction fees.
For now, at least, the U.S. economy continues to defy gloomy expectations. The Consumer Confidence Index is at its highest level since July 2021, according to the latest release from the Conference Board
In a May 31 appearance at a Bernstein investor conference, outgoing Visa CFO Vasant Prabhu highlighted big opportunities ahead, thanks to three growth engines. While traditional consumer payments continue to see solid growth, “new flows and value-added services can grow faster” than payments for a long time to come.
The new flows comprise new-use cases for Visa’s network, including peer-to-peer payments, payroll and cross-border remittances.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and stock market analysis.
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