The 5 Best Stocks To Buy And Watch Right Now (2024)

Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. So what are the best stocks to buy now or put on a watchlist?Microsoft (MSFT), Ares Management (ARES), Dexcom (DXCM), Square parent Block (SQ) and Neurocrine Biosciences (NBIX) are prime candidates.

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Inflation and the Federal Reserve tightening rates aggressively worried investors last year. But the market confounded expectations for difficulties and turned in an outstanding performance in 2023. More moderate gains are expected for 2024, though there is growing confidence the Fed will reach its goal of a soft landing.

Best Stocks To Buy: The Crucial Ingredients

Remember, there are thousands of stocks trading on the NYSE and Nasdaq. But you want to find the very best stocks right now to generate massive gains.

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.

CAN SLIMhas a proven track record of significantly outperforming the S&P 500. Outdoing this industry benchmark is key to generating exceptional returns over the long term.

In addition, keep an eye on supply and demand for the stock itself, focus on leading stocks in top industry groups, and aim for stocks with strong institutional support.

Once you have found a stock that fits the criteria, it is then time to turn to stock charts to plot a good entry point. You should wait for a stock to form a base, and then buy once it reaches a buy point, ideally in heavy volume. In many cases, a stock reaches a proper buy point when it breaks above the original high on the left side of the base. More information on what a base is, and how charts can be used towin big on the stock market, can be found here.

Don't Forget The M When Buying 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 uptrendand 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 remaining above the key 50-day moving average. Additionally, the S&P 500 and the Nasdaq recently hit fresh record highs.

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 60% to 80% market exposure.

Investors should take 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 average.

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. 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 Stocks To Buy Or Watch

• Microsoft
• Ares Management
• Dexcom
• Block
• Neurocrine Biosciences

Now let's look at Microsoft stock, Ares Management stock, Dexcom stock, Block stock and Neurocrine Biosciences stock in more detail. An important consideration is that these best stocks to buy and watch all boast impressive relative strength.

MicrosoftStock

Microsoft stock was actionable as it rebounded off the 10-week moving average, MarketSurge analysis shows. It is also actionable from a short consolidation that was just too short to qualify as a flat base. The ideal entry point here is 420.82, and the buy zone tops out at 441.86.

Therelative strength line has been moving sideways since late November. Microsoft stock is in the top 13% of issues in terms of price performance over the last 12 months.

Overall impressive performance is reflected in MSFT's strong IBD Composite Rating of 91 out of 99.

Microsoft has seen EPS grow by an average of 25% over the past three quarters, which meets CAN SLIM requirements. In addition, earnings have grown by an average of 14%over the past three years, impressive growth for such a large firm.

Big Money players have been net buyers of MSFT stock of late, with its Accumulation/Distribution Rating coming in at B-.

In late January the Redmond, Wash.-based firm reported that earnings per share had popped 33% to $2.93 as revenue climbed 18% to $61.1 billion for the most recent quarter. Microsoft Cloud revenue rose 24% year over year to $33.7 billion in the September quarter.

CEO Satya Nadella boasted about the firm'sartificial intelligenceinitiatives following the results.

"We've moved from talking about AI to applying AI at scale," Nadella said in a statement. "By infusing AI across every layer of our tech stack, we're winning new customers and helping drive new benefits and productivity gains across every sector."

Microsoftrecentlyunveiled its own AI chip, the Azure Maia AI Accelerator, to ease its dependence on Nvidia GPUs. It is designed to run generative AI and other AI workloads, including large language model training and inference. The firm plans to roll out Maia to its data centers early next year.

It remains to be seen whether moves to adopt a vertical integration approach by Microsoft,Apple (AAPL) and others could be a longer-term threat to chipmakers like Nvidia and Advanced Micro Devices (AMD).

Microsoft has been making good progress since it showed off its new Bing search engine and Edge web browserthat use AI technology.Microsoft hopes the OpenAI-based technology can help Bing chip away at Google's dominance in the internet search market. The stock was given a flurry ofprice-target hikesfrom analysts after the presentation. '

The firm kept up the momentum by adding artificial intelligence tools to its popular Office productivity applications.

This comes after Microsoft announced an investment reportedly worth $10 billion in artificial intelligence startup OpenAI.

The software giant is providing its Azure cloud computing infrastructure for OpenAI. It also is adding OpenAI models to its consumer and enterprise software products.

Microsoft may have strengthened its OpenAI position after the AI startup ousted and then brought back CEO Sam Altman in a five-day span. Microsoft has said that Copilot for Security, a generative AI cybersecurity tool, will launch April 1.

As if that wasn't enough, the tech giant unveiled Surface AI PCs and showed off Copilot functionality at its "New Era Of Work" event on March 21.

Excellent sustained performance has won Microsoftstock a spot in theIBD Long-Term Leaders Portfolio.

Ares Management Stock

ARES stock has formed a flat base with an ideal buy point of 139.40. It trying to move higher after getting support at its 21-day exponential moving average.

Ares also offered an early buying opportunity as it broke the trendline sloping down from its Feb. 8 high, though it backed off. At this point, the March 21 high of 137.88 might be a better early entry, which would also clear some short-term levels.

Overall performance is very strong, with its IBD Composite Rating coming in at 95. Earnings performance is particularly strong too, with ARES stock holding an EPS Rating of 97 out of 99.

Nevertheless, ARES has been doing very well on the stock market over the past 12 months. It is in the top 10% of issues over that period.

Ares is a diversified alternative asset manager, engaged in direct lending, private equity, and investment in infrastructure and real estate. The firm is looking to put $111 billion in dry powder to work as it looks to maintain fast earnings growth.

Ares was cofounded in 1997 by Tony Ressler, who also cofounded Apollo Global Management.

The firm's assets under management grew 19% to $418.8 billion in Q4, helping to drive a 39% increase in EPS per class-A share to 86 cents.

On the Q4 earnings call, CEO Michael Arougheti said that Ares had its second-largest fundraising year despite a difficult year for fundraising across its industry. "We entered 2024 in the enviable position of having more than $110 billion in dry power to invest in what we believe is an attractive vintage, providing the opportunity to drive strong earnings growth in the years ahead."

The firm is underweight office buildings, which comprise just 4% of its real estate portfolio. But the company recently formed a joint venture to invest in "high-quality distressed office buildings in New York," looking for favorable deals amid scarce capital for that particular asset.

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

DexcomStock

DXCM stock is in a buy zone above a flat-base entry of 126.44, which it initially cleared on March 6, according to MarketSurge analysis.

This is a first-stage pattern, which means it is more likely to net big gains for investors. Dexcom stock sits clear of both its short-term moving averages and its 50-day line.

Dexcom is in the top 23% of stocks in terms of price performance over the last 12 months. In fact, it has rallied around 80% from its 12-month lows while its relative strength line is also gaining.

Overall top-notch performance is reflected in its solid IBD Composite Rating of 94. Earnings grew by 47% in the most recent quarter. Even more impressively, they grew by an average of 75% over the past three quarters.

Dexcom makes continuous glucose monitoring systems for ambulatory use by patients with diabetes. That's a landmark change in diabetes care.

The company ended many years of losses with earnings of 9 cents a share in 2018, then saw a 397% surge in EPS to 46 cents in 2019. It has been consistently profitable ever since

Dexcom is continuing to innovate. Indeed, the latest twist came with the news that its newest body-worn glucose monitor has been cleared for people who don't require insulin treatment by the Food and Drug Administration.

This means the company can cash in on the expanding obesity treatment market.

It remains to be seen how much of a tailwind this will be, for Dexcom is targeting its new continuous glucose monitor, Stelo, at the 25 million people in the U.S. with non-insulin intensive type 2 diabetes.

William Blair analyst Margaret Kaczor Andrew believes it could be a big driver of profits given people can also request the device over the counter rather than requiring a prescription.

"The broad approval — as well as the (over-the-counter) indication, which eliminates the need for a prescription — increases the (total addressable market) by many multiples," she said.

Experts say doctors are prescribing continuous glucose monitors for patients taking weight-loss drugs.

"As awareness of metabolic health and disorders brings people into the system, it should raise demand for technologies like CGM even higher," Andrew said. "All of this should make the CGM market — and its largest pure-play beneficiary in Dexcom — one of, if not the, fastest-growing medical technology market (already above $5 billion) over the next five years."

Block Stock

Block stock has displayed some up-and-down action since its Feb. 23 earnings gap-up, which briefly cleared an 80.29 cup-base buy point. SQ stock then forged a high handle with an 83.29 entry. Shares of the Square parent have rallied back into the buy zone above the original 80.29 trigger.

The Square parent has moved clear of the 50-day and 200-day moving averages. They are also above the shorter-term 10-day and 21-day lines.

Payment processing may not sound like the most exciting business in the world, but it has made the company extremely profitable. Recent success has helped Square-parent Block rally well of its 2024 lows. SQ is up more than 4% for the year so far.

Square has built a two-sided digital payments ecosystem, with products designed for both merchant sellers and consumer buyers. The Square Cash App has 56 million active monthly users. Its Cash App helps individuals manage money, buy stocks and cryptocurrency, and more.

The company aims to bridge the Cash App and merchant ecosystems with consumer financing services from Afterpay. Block acquired Afterpay in early 2022. Afterpay offers consumers "buy now, pay later" installment payment services.

Overall performance is strong, with SQ stock holding a perfect IBD Composite Rating of 99. Earnings performance is also a strong suit, with its EPS Rating at 97.

There are certainly some promising signs for the future. The stock soared around 16% after EPS popped 105% to 45 cents in Q4. Revenue climbed 24% to $5.8 billion.

While its report was mixed, the stock surged on guidance. Block forecast gross profit of at least $8.65 billion vs. consensus for $8.55 billion.

Wall Street expects earnings to rocket 79% in 2024, before growing an additional 33% in 2025. Big Money has been buying up the stock of late, with its Accumulation/Distribution Rating coming in at B.

In total, 41% of shares are held by funds. Notable holders include the highly rated Allspring Growth Fund class A (SGRAX).

3 Stocks Near Buy Points As Two Tailwinds Drive Market

Neurocrine Biosciences

The biotech play is just below a buy zone after clearing a new flat-base entry of 143.35 in high volume Thursday. Investors also could still use 142.50 as an early entry.

This is an early-stage base, which means it is more likely to make big gains.

The stock is seeing its relative strength line move higher again after a recent decline during the base-building period.

This bullish action has won Neurocrine a spot on the prestigious IBD Leaderboard list of top stocks.

Overall performance is strong: The stock holds a best-possible IBD Composite Rating of 99.

Neurocrine is best known for its tardive dyskinesia treatment, Ingrezza, but it's also working on more new products. This is important, as a key part of the CAN SLIM formula is the N, which stands for New Products.

Enthusiasm is building for Neurocrine's early-stage efforts to target muscarinic receptors in the brain. Doing so could lead to new treatments for other movement disorders, schizophrenia and central nervous system conditions. One analyst says the portfolio of muscarinic receptor-targeting drugs could be worth $1 billion.

Institutional investors have been net buyers of Neurocrine Biosciences stock lately, with its Accumulation/Distribution Rating coming in at B-.

In total, 66% of shares are currently held by funds, MarketSurge data shows. Noteworthy holders include the Fidelity Contrafund and the T. Rowe Price New Horizons Fund. Both of these are very highly rated by Investor's Business Daily.

Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.

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