Finding the best growth stocks to buy is no easy task. But you can streamline your search by focusing on the three key factors for stock investing. In both bull and bear markets, regularly checking time-tested stock screens can help you put the best potential stock picks on your list of stocks to buy and watch. While well-known tech and growth stocks like Apple (AAPL), Alphabet (GOOGL), Tesla (TSLA) and Nvidia (NVDA) will come on and off these stock lists depending on market conditions, checking the names on lists like the IBD 50, IBD Long-Term Leaders and IBD Sector Leaders always provides a good starting point.
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This process will help you identify and track stocks such as NVDA, AAPL, GOOGL, TSLA and Microsoft (MSFT). In strong markets, household names like Facebook parent Meta Platforms (META), Amazon.com (AMZN) and Netflix (NFLX) may also make an appearance.
To stay on top of promising younger and new companies, check the IPO Leaders list. Current top IPO stocks include On Holding (ONON), Life Time (LTH), DoubleVerify (DV), Intapp (INTA) and more. LTH and ONON stock, along with fellow 2021 IPO Sovos Brands (SOVO), were recently featured as three promising IPOs.
All three companies were highlighted on the IBD Breakout Stocks Index, yet another source of potential stock picks for both new and established firms.
Find The Best Stocks To Buy And Watch
The company names will change over time and across fluid stock market cycles. But the traits of winning stocks you look for remain the same.
Here’s an effective way to hone your stock picks and zero in on the best stocks to buy and watch. Focus on stocks with exceptional earnings growth that are breaking out of a chart pattern during a strong market uptrend.
For beginning investors unsure of how to start investing in stocks (or for experienced investors looking to save time), start with this simple three-step routine. One key part of that process is to track suggested market exposure levels to manage risk.
Maintaining your list of stocks to buy and watch is an ongoing process. Regularly use lists like IBD Long-Term Leaders, IBD Sector Leaders, IBD 50, IBD Big Cap 20 and IPO Leaders to continually find potential stock picks.
Be sure to also have sound rules for when to sell stocks since even the best stocks eventually falter, especially in a bear market or market correction. The 2020 coronavirus stock market crash and rebound only reinforced that reality.
Find The Best Growth Stocks With The IBD Stock Screener
Stock Picks: 7 Traits Of Winning Stocks
Through a groundbreaking study of 100-plus years of market history, IBD identified seven common traits of winning stocks, with earnings growth being one of the most critical factors.
During their big moves, top performers like GOOGL, AAPL, NVDA, AMZN, MSFT and NFLX have all shown explosive, even triple-digit, earnings growth as their share prices rose dramatically. New IPOs to watch, such as DV and ONON stock, have also shown many of these key stock-picking traits. DoubleVerify was just featured as the IPO Stock Of Week.
As you go through a buying checklist to evaluate your potential stock picks, look for companies posting 25% or higher earnings growth.
Be sure to also use IBD Stock Checkup to check your stock’s EPS Rating and many other key stock-picking metrics. You’ll instantly see if the stock earns a pass or fail grade for both its quarterly and annual earnings growth.
Tips On Evaluating Earnings Growth
Stock Picks: Look For Growth Stocks Forming Chart Patterns
Just because a company has stellar earnings growth doesn’t mean it’s a good time to buy its stock. Several other factors come into play, including the stock market trend and the action in the stock chart. You can significantly improve the performance of your stock picks — and reduce your risk — if you make sure the stock chart and the market are giving you the green light to buy.
Chart patterns serve as a launchpad for a stock’s climb. Also known as bases or consolidations, these patterns form after a stock has already climbed and is now taking a breather to hopefully set up a new run. The ideal time to buy a stock is when it completes that base and proves its strength by punching through a point of resistance in heavy volume.
The most profitable and common chart patterns to look for are the cup with handle, double bottom and flat base. Once you identify companies with strong earnings that are also forming one of these three patterns, you’ll be well on your way to finding the best stocks to buy and watch.
Winning moves from AAPL stock, NVDA, GOOGL, AMZN, NFLX, META and countless others over the years prove this point. Virtually all of the market’s biggest winners form one or all three of these patterns as they make their big climbs.
These chart patterns repeat again and again, year after year.
Tips On How To Read Stock Charts
Stock Picks: Where To Find The Best Stocks To Buy And Watch
To help streamline your research, IBD provides a collection of time-tested stock lists. These screens are computer generated and based on proven criteria rather than opinions.
The criteria come from our study of market history in which we identified the common characteristics winning stocks share in the early stages of a big move. With these screens, we highlight today’s stocks that are most strongly showing those same telltale traits.
While you should never buy a stock just because it’s on one of IBD’s screens, these lists are an excellent starting point for building a high-quality, actionable watchlist.
Be sure to regularly check IBD Stock Lists Update to see which companies just came on and off IBD’s top screens.
Tips On Where To Find The Best Stocks
Tips On Finding The Best Stocks To Buy And More
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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Source: https://www.investors.com/research/stock-picks-best-stocks-to-buy-and-watch/?src=A00220&yptr=yahoo