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 Alphabet (GOOGL), Walmart (WMT) and Adobe (ADBE) are standout performers, at least relatively. They are also part of the Robinhood Top 100 Stocks list, the platform’s most popular stocks among traders.
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Unlike meme stocks such as GameStop (GME) and AMC Entertainment (AMC), these stocks offer a mix of solid fundamental and technical performance.
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.
The stock market turned in stunning gains in 2023 and will now look to build on those gains. Indexes are looking strong, with the Nasdaq and the S&P 500 both above the key 50-day moving average. The S&P 500 also just hit a record high for the first time in two years.
The stock market is back in a confirmed uptrend, though there have been a number of distribution days lately. Now is a good time for investors to make stock purchases. It’s also a good time to add to existing holdings at follow-on opportunities. IBD is currently recommending 80% to 100% market exposure.
Investors should be taking care to invest in high quality stocks. The selections below are among the best stocks to buy or watch now. The IBD 50 is also a rich hunting ground.
Despite the market going back into a confirmed uptrend, 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.
Remember, there is still significant headline risk. Inflation could still be an issue while the Russia-Ukraine conflict is a wild card that has proved its ability to shake the market, and the current issues in Israel add even more uncertainty.
Things can quickly change when it comes to the stock market. Make sure to keep a close eye on the market trend page here.
Best Robinhood Stocks To Buy Or Watch
Now let’s look at Google stock, Walmart stock and Adobe stock in more detail. An important consideration is that these stocks are solid from a fundamentals perspective, while institutional ownership is also strong.
Looking For The Next Big Stock Market Winners? Start With These 3 Steps
Google Stock
Google-parent Alphabet is holding above a 139.42 cup with handle entry, MarketSmith analysis shows.
The stock found support at its rising 50-day moving average before rebounding higher, a good sign. But that followed a post-earnings tumble on Jan. 31.
The relative strength line for GOOGL stock is trying to turn higher again, after a recent dip.
GOOGL stock has a near-perfect IBD Composite Rating of 97. That puts it in the top 3% of stocks tracked overall.
Earnings are better than stock market performance, with its EPS Rating a mighty 98 out of 99.
Analysts see strong growth ahead, with Google earnings per share expected to surge 18% in 2024 and a further 16% in 2025.
The tech giant has a Relative Strength Rating of 84. That means it has outperformed 84% of stocks tracked over the past 12 months in terms of price performance.
Google stock pulled back after the firm’s most recent earnings report despite beating earnings and revenue views. It was hit after its core advertising business slightly missed analyst expectations.
Google earnings for the quarter ending Dec. 31 jumped 56% to $1.64 a share while gross revenue rose 13% to $86.31 billion. Cloud computing revenue growth re-accelerated and beat estimates.
Analysts raised their 2024 capital spending estimates in the wake of Google management commentary on rising AI investments.
“Capex is heading higher, but we see a leading gen AI pipeline and incremental cloud and subscription revenue opportunities,” Morgan Stanley analyst Brian Nowak said in a note to clients.
Google aims to counter Microsoft‘s (MSFT) investment in artificial intelligence startup OpenAI by making its own generative AI tools available to software developers.
At the Google I/O 2023 developers event on May 10, Alphabet showcased how generative AI will be integrated into search, maps, Workspace, photos, cloud computing and Android devices. Google discussed how advertising will evolve as generative AI is added to search.
Walmart Stock
Walmart stock is in a buy zone after clearing a cup-with-handle ideal buy point of 163.57. It’s now hitting resistance around the top of the consolidation and 170 level.
One flaw is a significant portion of the base formed under the 10-week line for WMT stock. But the relative strength line is surging with gusto of late on its weekly chart.
Since the start of the year Walmart stock is up nearly 8%. This is better than the S&P 500’s gain of almost 5%.
It is in the top 34% of stocks in terms of price performance over the past 12 months.
Overall performance is solid, but not spectacular. WMT stock holds an IBD Composite Rating of 80 out of 99. Earnings in particular are not ideal, with its EPS Rating coming in at 74 out of 99.
Walmart earnings growth slowed to 2% for fiscal Q3 2024, the second quarter of slowing growth in a row. It comes after a period of accelerating, double-digit gains. Revenue grew 5.2% to $160.8 billion in Q3. Revenue growth has hovered in the mid- to upper-single digits the past six quarters. The results still came in ahead of Wall Street expectations.
Net sales from customer purchases rose 5.3% to $159.44 billion while membership revenue and other income ticked up 1.6% to $1.37 billion.
Comparable sales excluding fuel increased 4.7% across all U.S. locations. Same-store sales at Walmart U.S. stores climbed 4.9%, down sharply from 8.2% growth last year. Sam’s Club comparable sales increased 3.8%, decelerating from a 10% gain for the period in 2022.
Walmart lifted its outlook on results and guided full-year adjusted earnings of $6.40-$6.48 per share on 5% to 5.5% net sales growth. The outlook was below analyst forecasts of $6.50 earnings per share and also under the Street’s revenue predictions.
Wall Street analysts see the firm’s Walmart+ program as a potential benefit for the company. Walmart+ costs $12.95 a month, or $98 a year. The program’s benefits can be used, in one way or another, at more than 4,700 stores. The service offers free delivery on items, at in-store prices, with 2,700 stores capable of offering same-day delivery.
S&P 500 Eyes 5,000 In ‘Lock Out’ Rally’
Adobe Stock
Adobe stock is one to watch as it gets support just below a flat base with an ideal buy point of 633.89. Shares flirted with the level before slipping back.
ADBE stock found buyers at the 50-day moving average and has also retaken the 21-day exponential moving average.
The relative strength line has been taking a breather during the base-building period. This reflects underperformance vs. the broader S&P 500.
Long known for its design and publishing software, Adobe has become a major player in cloud computing and data analytics.
In addition, artificial intelligence, one of the hottest investing themes of 2023, is a strength for the California company. It is benefiting after announcing a slew of new AI initiatives.
It recently announced more than 100 new generative AI features and updates for its creative software. The company added three new image generators to its Firefly family of products and released scores of AI features for its Creative Cloud suite of applications.
Wall Street analysts were dazzled by the smorgasbord of features, with some rewarding the stock with price target hikes. Morgan Stanley analyst Keith Weiss said the announcements had a “wow factor” due to the breadth and quality of capabilities shown.
Overall performance for ADBE stock is strong, with its IBD Composite Rating coming in at a perfect 99.
It is in the top 1% of stocks in terms of price performance over the past 12 months. So far in 2023 alone it has surged around 79%.
Earnings performance is also impressive, with the stock holding an EPS Rating of 97 out of 99. In the most recent quarter, Adobe earnings rose 19% year over year while sales increased 12%.
Over the past six quarters, revenue growth has ranged from 9% to 14%.
For its full fiscal 2024, Adobe forecast adjusted earnings of $17.80 a share, up 11%, on sales of $21.4 billion, up 10%. Analysts were expecting earnings of $18 a share on sales of $21.73 billion. This disappointment caused the stock to pull back and go into its most recent base-building phase.
Nevertheless, Adobe’s powerful performance has netted it a spot on the prestigious IBD Tech Leaders list.
Institutional investors have been increasing their holdings of the stock of late. This is shown by its Accumulation/Distribution Rating of B-. Notable holders include Fidelity Contrafund.
The stock is also showing leadership vs. its peers, currently sitting at the summit of the competitive IBD Computer Software-Desktop industry group.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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