These Are The Five Best Stocks To Buy Now Or Add To A Watchlist

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? Meta Platforms (META), CyberArk Software (CYBR), TJX (TJX), Taiwan Semiconductor (TSM) and Interactive Brokers (IBKR) are prime candidates.

The market confounded expectations for difficulties and turned in an outstanding performance in 2023. Inflation and the Federal Reserve tightening rates aggressively worried investors this past year. More moderate gains were expected for 2024, but the benchmark S&P 500 has turned in very strong gains amid growing confidence that the Fed will reach its goal of a soft landing. Donald Trump's election victory boosted stocks, though traders are now weighing the pros and cons of his plans heading into 2025.

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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 IBD Methodology 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.

Using such an approach can help give you an edge over the benchmark 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 it 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 to win big on the stock market, can be found here.

Don't Forget The Stock Market Direction When Buying Stocks

A key part of investing is to keep track of the 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 has been building on those gains so far this year, for the most part. The major indexes surged to record highs in the wake of Donald Trump's presidential victory, though a more cautious outlook from the Fed on interest rates is weighing on stocks.

The stock market is looking bullish again, though off recent highs. Investors should be looking to buy high-quality issues with good growth prospects. The selections below are among the best stocks to buy or watch now. The IBD 50 is also a rich hunting ground.

Nevertheless, 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.

Things can change quickly 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

• Meta Platforms
• CyberArk Software
• TJX
• Taiwan Semiconductor
• Interactive Brokers

Now let's look at Meta Platforms stock, CyberArk Software, TJX, Taiwan Semiconductor and Interactive Brokers in more detail. An important consideration is that these best stocks to buy and watch all boast impressive relative strength.

Meta Platforms Stock

The social media stock is just below a buy zone after previously clearing a flat-base with an ideal entry point of 602.95, MarketSurge analysis shows. This is arguably part of a bullish base-on-base pattern.

Shares have rebounded from the 50-day line but are just below the 21-day line. This is an encouraging bullish sign.

The relative strength line had been moving sideways during its consolidation phase but is now bending upward. This line reflects a stock's gains vs. the benchmark S&P 500.

META stock has been on a strong run this year. It has rallied 69% so far in 2024. This easily eclipses the S&P 500's lift.

The stock is an excellent all-around performer, with its IBD Composite Rating coming in at a strong 97 out of 99. Earnings performance is key here, with its EPS Rating sitting at 96.

Earnings have grown an average 59% over the past three quarters. This is comfortably clear of the 25% growth levels sought by investors following The IBD Methodology.

Strong earnings are expected by Wall Street, with full-year EPS seen rising 46% this year before slowing to 12% growth in 2025.

Big Money has been buying the stock of late, with its Accumulation/Distribution Rating coming in at B-. In total, 47% of META stock is currently held by funds, according to MarketSurge data.

Strong Offerings For Social Media Play

Meta Platforms has a robust roster of social media properties including Facebook, Instagram and WhatsApp.

The social media stock is a turnaround story. It has been boosted by job cuts amid an efficiency drive by Chief Executive Mark Zuckerberg, as well as an online advertising revival.

The firm is betting big on the nascent space of artificial intelligence. Meta recently told investors it expects to spend $38 billion to $40 billion on capital expenditures this year, up from its previous range. The company also said it expects "significant capital expenditures growth" for 2025.

Those investments will focus mostly on building advanced data-center capacity to support training and deploying AI algorithms.

During the earnings call, Zuckerberg said there are several opportunities to use AI to improve Meta's core business.

"So I think we should invest more there," Zuckerberg said. "And second, our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there too."

It has also been reported that the social media firm is looking to add displays to its Ray-Ban branded smart glasses next year as it "accelerates" its smart glasses rollout.

CyberArk Software Stock

The cybersecurity company's stock is offering an entry as it rebounds off its 50-day moving average. It is actionable as much as 5% above this key benchmark. It has also rallied above its 21-day exponential average

CyberArk also has a three-weeks-tight entry with an ideal buy point 333.32, according to MarketSurge analysis. Such patterns are usually used as opportunities add to an existing position.

In addition, the relative strength line remains near highs despite a slight dip. Overall performance is strong, which is reflected in CyberArk's strong IBD Composite Rating of 95.

Earnings performance for the stock is solid, but not ideal. This is reflected in its EPS Rating sitting at 81 out of 99.

However recent growth has been excellent. Earnings surged 124% year over year in the most recent quarter.

More progress is expected, with Wall Street analysts seeing EPS rising 163% in 2024 before slowing to 22% growth in 2025.

There has been more buying than selling among institutions of late, which is reflected in the stock's Accumulation/Distribution Rating coming in at B.

In total, 56% of CyberArk stock is held by funds, according to MarketSurge data.

Wall Street is getting more bullish on the stock amid rising hopes of continued economic progress.

The Israel-based company is an industry leader in privileged access management, controlling access and monitoring critical systems.

It has been making efforts to branch out into a one-stop shop, safeguarding not just human identities but machine identities. This took a step forward via the acquisition of Venafi, which the firm says expanded its total addressable market by $10 billion to reach $60 billion.

"Ongoing digital transformation, pervasive cloud computing and the rise of AI are driving an exponential increase in the number of machine identities, which can outnumber human identifies by as much as 45 to 1," CyberArk said in announcing the closing of its Venafi deal on Oct. 1. "If left unprotected and unmanaged, these identities can serve as a lucrative hunting ground for cybercriminals who seek to exploit their vulnerabilities."

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

TJX Stock

The retail stock is another of the best stocks to buy now. It is trading in the buy zone above a flat base ideal entry of 121.13, according to MarketSurge analysis.

Shares rebounded from a 10-week line test on Nov. 20 following Q3 earnings and are rebounding again after getting support at the 50-day/10-week lines.

This is an early-stage pattern, a plus. The stock rebounded well after testing consolidation lows, retaking the important 50-day moving average in the process.

Solid all-around performance is reflected in TJX's IBD Composite Rating of 89. Earnings performance is strong, with the stock holding an EPS Rating of 89 out of 99.

Over the past three quarters earnings have grown by an average 15% for TJX, though the pace has slowed. Sales growth has held steady at the 6% mark in each of the past three quarters.

TJX has been performing well in 2024, with its stock price swelling by nearly 30% so far this year. This is above the benchmark S&P 500's lift.

Institutions have been net buyers of TJX stock of late, with its Accumulation/Distribution Rating coming in at B-. At the moment, 48% of its shares are held by funds, according to MarketSurge data.

The lauded Fidelity Contrafund (FCNTX) is among the noteworthy holders of the stock.

William Blair analyst Dylan Carden previously told IBD that investors are back to picking apparel winners and losers based on individual performance rather than industry trends.

The best-positioned retailers are those able to forecast demand, and manage inventory to prevent steep discounts.

Off-price retailers like TJX have been seeing greater traffic in comparison with mall department stores.

Earlier this year Morgan Stanley called TJX its preferred off-price retailer, with room for further valuation expansion thanks to its higher profitability profile.

Taiwan Semiconductor Stock

The chipmaker is in a buy zone after clearing a 205.63 cup-with-handle buy point, according to MarketSurge analysis.

This offered up an early entry for aggressive investors.

The stock staged an upside reversal on Dec. 20 to close above its 21-day exponential moving average and the 50-day line.

In addition, the relative strength line is battling back after a recent dip, a bullish sign.

Overall performance is strong, which is reflected in TSM's near-perfect IBD Composite Rating of 98. Earnings performance is particularly noteworthy, with its EPS Rating standing at a near-perfect 98.

Indeed, earnings have grown an average of just over 30% over the past three quarters. This is clear of the 25% growth sought by those following IBD investing principles. EPS grew by an even more impressive 56% in the most recent quarter.

The company's Chief Financial Officer Wendell Huang credited the results to "strong smartphone and AI-related demand for our industry-leading 3-nanometer and 5-nanometer technologies."

Last week, Taiwan Semiconductor reported November sales jumped 34% vs. a year earlier, led by AI chips. Analysts say the foundry giant is on track to meet or beat Q4 estimates.

Earnings are seen rising 32% in 2024 before turning in still-solid growth of 30% next year.

The Taiwanese company has been rewarding investors so far in 2024, rising just shy of 100% year to date.

Institutional sponsorship has increased of late, with the stock's Accumulation/Distribution Rating coming in at B.

A veritable smorgasbord of top funds currently have stakes in the chipmaker. These include the MFS Growth Fund (MFEGX) and Fidelity Contrafund (FCNTX).

What To Do Now As Bulls Fight Back

Interactive Brokers Stock

The financial stock is offering an entry as it rebounds off its 50-day moving average. The buy point here sits at around 172.50. Investors also could use Monday's high of 179.72 as another entry, which would be just above the 21-day line.

It will be looking to turn in more gains after almost doubling since clearing a buy point of 89.72 in January, according to MarketSurge analysis. It is also well extended past a consolidation entry of 129.19 from September.

Excellent all-around performance is reflected in IBKR's lofty IBD Composite Rating of 98. Earnings are a strength, with Interactive Brokers also holding an EPS Rating of 96 out of 99.

It is very strong on the technical front as well. The stock has seen its price balloon almost 69% so far this year. This is comfortably better than the benchmark S&P 500's lift.

Institutions have been net buyers of the stock lately, with its Accumulation/Distribution Rating coming in at B. Currently, 42% of its shares are held by funds, according to MarketSurge data. In the third quarter, Interactive Brokers earnings grew 13% as sales rose 19%. The brokerage firm slightly missed earnings estimates amid higher costs and a one-time charge.

Revenue from commissions jumped 31% as daily average revenue trades, a key metric for the firm, soared 42%. Customer accounts surged 28%. Net interest income grew 8%.

In a Dec. 11 investor presentation, Interactive Brokers tied account growth to "increased interest in the financial markets and the growing interconnectedness of investors worldwide."

The recent IBD Stock Of The Day has been attempting to innovate as it chases even more growth. In this quarter alone it announced an enhanced desktop trading platform with new tools such as options screeners. It also launched AI-powered news summaries and election forecast contracts ahead of the November U.S. election.

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

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