These Are The Best Robinhood Stocks To Buy Or Watch Now

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, Apple (AAPL), Microsoft (MSFT) and Costco Wholesale (COST) are standout performers. Unlike misfiring 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.

A stock market rally that kicked off 2022 soon fell on its face. The market is now trying to rally again following bearish recent action. The Nasdaq has reclaimed the 50-day moving average while the S&P 500 is above both the 50-day and 200-day lines. The Dow Jones Industrial Average has also been making progress.

With the market back in a confirmed uptrend now is a good time to be making new buys. Investors should take action to increase exposure now, though a gradual approach makes sense given the volatility of the past few months. The stocks below are potential candidates.

Remember, there is still significant headline risk going forward. Inflation remains a key issue while the Russia-Ukraine conflict is a wild card that has proved its ability to shake the market.

But remember, 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 Apple stock, Microsoft stock and Costco stock in more detail. An important consideration is that these stocks are solid from a fundamental 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.

Apple Stock

AAPL stock is trading below a double-bottom pattern entry. The ideal buy point here is 176.75, according to MarketSmith analysis.

Apple stock recently reclaimed its 50-day line after rebounding from its 200-day moving average. Momentum looks on its side after it moved up nine sessions in a row.

Aggressive investors could have used a trendline, just above the 50-day line, as an early entry.

The relative strength line has just hit a new high. A protracted upwards spike could propel AAPL higher once again.

A key point in the favor of Apple stock is the fact it performed better than most stocks, especially techs, during the market pullback.

Apple stock has seen its Composite Rating shoot up to a strong 94 out of 99. Apple became the first company to reach a market capitalization of $3 trillion earlier this year, though it has now backed off this level.

The IBD Stock Checkup tool shows earnings growth is bouncing back in recent quarters following the Covid-19 pandemic. Apple stock got a boost after reporting earnings for Q1 of fiscal 2022.

It was the firm's best-ever quarter for revenue, with all categories excluding iPads coming in above views. Apple did not give guidance for the current quarter, though executives were relatively upbeat. The firm has not given specific quarterly guidance since the Covid-19 pandemic began.

Supply constraints meant supply could not keep up with demand. Another bright spot was sales in China, which grew 21% in the quarter.

Apple's EPS growth has averaged 65% over the past three quarters. This is comfortably clear of the 25% earnings growth sought by the CAN SLIM cognoscenti.

Analysts see earnings growth of 10% in fiscal 2022 and 7% growth in 2023. Investors will want to see CEO Tim Cook squeeze out more impressive gains.

With its iPhone business maturing, investors are looking for a new big growth driver for Apple stock. Services and wearables are seen as two key drivers.

In the September quarter, Apple's services revenue rose 26% year over year to $18.3 billion. Services include the App Store, AppleCare, iCloud, Apple Pay, Apple Music, Apple TV+, Apple Arcade and other offerings.

One reason to be bullish on Apple is it continues to produce new products, which is a major success factor in the CAN SLIM system.

Earlier this month Apple hosted its latest product launch. The event, broadcast live online from Apple Park headquarters in Cupertino, California, saw a slew of products unveiled.

Perhaps most notable was a new low-cost 5G iPhone SE. It will retail for $429 and will hit store shelves on March 18.

Speculation continues that Apple is looking to make a self-driving electric car.  In November Bloomberg reported Apple is aiming to launch self-driving EVs in 2025.

Looking For The Next Big Stock Market Winners? Start With These 3 Steps

Microsoft Stock

Microsoft stock is a hair above its 200-day moving average. Given Microsoft is an IBD Long-Term Leader, this key level can be used as an entry.

MSFT is also working on a consolidation, but the official buy point is 349.77, quite a distance off.

The relative strength line for Microsoft stock has been moving sideways to slightly lower over the past couple of months. The fact it is not too far off highs is encouraging.

Microsoft is one of a handful of U.S.-listed stocks with trillion-dollar market caps. It was the second stock to achieve the feat, after old rival Apple (AAPL). Both now have valuations above $2 trillion.

MSFT is now trailing Apple by quite a margin again after briefly snatching Apple's crown as the world's most valuable publicly traded company.

Recent market turbulence has knocked Microsoft stock's IBD Composite Rating down to a robust, but not ideal, 87 out of 99. Key to Microsoft's high score is its excellent earnings performance, which is reflected in its EPS Rating of 94 out of 99.

Microsoft managed to top analyst estimates for the December quarter. It earned $2.48 per share on sales of $51.7 billion in the quarter ended Dec. 31. On a year-over-year basis, Microsoft earnings rose 22% while sales increased 20%.

Analysts had predicted Microsoft earnings of $2.08 a share on sales of $44 billion.

"Solid commercial execution, represented by strong bookings growth driven by long-term Azure commitments, increased Microsoft Cloud revenue to $22.1 billion, up 32% year over year," Chief Financial Officer Amy Hood said in a news release.

Microsoft guided for sales of $48.9 billion in the current quarter, based on the midpoint of its guidance. This was better than analyst expectations for $48.1 billion. In the year-earlier period, it posted $41.7 billion in sales.

Microsoft recently agreed to buy Activision Blizzard (ATVI) for $69 billion cash. The video game publisher behind Call of Duty and many other big titles had tumbled in recent months in part over accusations of sexual harassment by company executives.

Institutional investors remain big backers of Microsoft stock overall, though it has been selling off of late amid broad weakness in software. In total, 41% of its stock being held by funds. It boasts eight consecutive quarters of increasing fund ownership.

Microsoft has introduced Windows 11, the biggest upgrade to its PC operating system in six years. It features a refreshed design with a new user interface and Start menu. It also provides PC performance improvements and integrates the Teams videoconferencing app. Windows 11 is the successor to Windows 10, which came out in July 2015.

But it is the firm's successful pivot into cloud computing that has really been driving growth.  It also benefited from the work-from-home and learn-at-home trends during the Covid-19 pandemic. Microsoft's cloud software and services are aiding at-home workers and students.

Can Market Rally Keep Power As Yields Soar?

Costco Stock

Costco made progress after posting solid earnings. It is sitting in its buy zone above a cup with handle base buy point of 545.39, according to MarketSmith analysis. On a weekly chart it also offers a higher handle buy point of 566.85.

It is now pulling away from the key 50-day moving average. The relative strength has also flashed a bullish signal by soaring to a record highs.

The stock boasts good all-round performance with both earnings and stock market performance strong.

It has managed to outperform 93% of stocks over the past 12-months in terms of price performance.

Costco is currently the top name in the Retail-Major Discount Chains industry group. The institutional favorite boasts eight consecutive quarters of increasing fund ownership.

Over the past 13 weeks institutional shareholders have been standing pat on COST stock.

Earnings growth is not ideal, coming in at an average of just over 11% over the past three quarters. However, they have accelerated for the past two quarters.

Costco has been a big winner during the Covid-19 pandemic. It just reported another impressive quarter of performance.

EPS rose 15% to $2.92 per share while revenue climbed nearly 16% to $51.9 billion. This was better than Wall Street views for earnings per share of $2.76 on sale of $51.53 billion.

In addition, same-store sales climbed 11.1% excluding gasoline on an adjusted basis. And while sales slowed down a bit compared to January and December, February comparable sales were up 10.6%.

Jefferies analyst Stephanie Wissink believes "the market may be underestimating the strength of Costco's position with higher inflation." She has a buy rating on COST stock with a 650 target.

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