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), Tesla (TSLA) and Exxon Mobil (XOM) are standout performers, at least relatively.
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.
A stock market rally that kicked off 2022 soon fell on its face. While the market battled back amid a better than expected earnings season, the latest uptrend is under pressure following Federal Reserve Chairman Jerome Powell’s hawkish Jackson Hole speech. The S&P 500, the Nasdaq and the Dow Jones Industrial Average all fell sharply last week, dipping back towards their 50-day moving averages.
Now is a time to be very careful about making any new buys. Only exceptional breakouts in exceptional stocks should be considered, such as those in the IBD 50. These names will tend to have rising relative strength lines. The stocks below are good candidates.
Also, make a defensive game plan for each stock you own. It is a good time to consider taking profits. In addition, 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.
It is important to stay disciplined and flexible. Stick to sound buy and sell rules as not every trade will work out, especially in the current volatile market.
Remember, there is still significant headline risk. Inflation remains a key issue while the Russia-Ukraine conflict is a wild card that has proved its ability to shake the market.
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, Tesla stock and Exxon stock in more detail. An important consideration is that these stocks are solid from a fundamentals 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 currently sits below a handle buy point of 176.25, according to MarketSmith analysis. AAPL has surged since hitting 129.04 in mid-June, retaking its 50-day and then its 200-day line.
Apple stock has performed better than most stocks, especially techs, during the market correction. The relative strength line recently hit fresh heights, a bullish indicator. This gauges a stock‘s performance compared to the S&P 500.
AAPL has seen its Composite Rating hold firm at a strong 91 out of 99. Earlier this year Apple became the first company to reach a market capitalization of $3 trillion, but is now well off this level.
The firm reported earnings at the end of July. Better-than-expected iPhone sales and services revenue cheered Wall Street, along with management predicting better revenue growth ahead.
AAPL was punished after management said the resurgence of Covid-19 in China could hurt sales by as much as $8 billion in the latest quarter.
It posted fiscal third-quarter EPS of $1.20 on sales of $83 billion in the quarter ended June 25, both slightly beating. On a year-over-year basis, Apple earnings fell 8% while sales inched 2% higher.
In the June quarter, Apple’s iPhone sales rose 3% to $40.67 billion. Smartphones accounted for 49% of the company’s total sales in the period.
Apple’s services revenue jumped 12% to $19.6 billion in the fiscal third quarter. Services include the App Store, AppleCare, iCloud, Apple Pay, Apple Music, Apple TV+, Apple Arcade and other offerings.
Analysts see earnings growth of 9% in fiscal 2022 and 7% growth in 2023. Investors will want to see CEO Tim Cook squeeze out more impressive gains.
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.
On June 6, Apple showcased features of its upcoming operating systems for iPhone, iPad, Mac and Apple Watch at its Worldwide Developers Conference. It also unveiled a second-generation Mac processor, M2, which is available first in two new laptops, the MacBook Air and MacBook Pro.
Earlier this year the firm also hosted its latest product launch. While a slew of products were unveiled, perhaps most notable was a new low-cost 5G iPhone SE. The device, which sells for $429, 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.
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Tesla stock has formed a consolidation with a 402.73 buy point, according to MarketSmith analysis.
It remains a long way from its entry, which makes TSLA one to watch for now. The stock has slipped back after clear its 200-day line. A decisive reclaiming of this level, perhaps just the above the recent short-term high of 314.64, would offer an aggressive entry.
Tesla‘s relative strength line has improved recently but remains off highs.
Lackluster recent stock market performance has overshadowed improving earnings. But recent gains has its IBD Composite Rating rise to 90 out of 99.
The stock checkup tool underlines the improving financial performance. Earnings have grown an average 173% over the past three quarters, well above CAN SLIM requirements. Longer term results are also impressive, with its three-year EPS growth rate coming in at 197%.
At Tesla’s annual meeting shareholders approved a 3-for-1 stock split. This took effect on Aug. 25. At the annual meeting, CEO Elon Musk spoke at length on Tesla’s prospects.
TSLA served up better-than-expected second-quarter earnings despite grappling with plant closures in Shanghai and supply shortages. Adjusted earnings climbed 57% to $2.27 per share, better than Wall Street expected. Revenue soared 42% year over year to $16.934 billion, of which $344 million came from regulatory credits.
Earnings and revenue did fall significantly vs. Q1, though they should rebound sequentially in Q3. Automotive gross margins came in at 27.9% vs. 32.9% the previous quarter.
Musk gave a positive update on Tesla’s oft-delayed Cybertruck during the conference call.
“Our team continues to focus on Cybertruck production readiness and some future platform design,” he told analysts. “We are expecting to be, still expecting to be in production with the Cybertruck in the middle of next year.”
Cybertruck deliveries, along with the Tesla Semi and Roadster, have been pushed back several times.
Tesla recently reported second-quarter deliveries of 254,695 electric vehicles, slightly below views. It was down nearly 18% vs. Q1’s record 310,048 but up 26.5% vs. a year earlier.
Tesla produced 258,580 vehicles in Q2 vs. 305,407 in Q1, nearly all Model 3 sedans and Model Y crossovers.
Tesla Shanghai was shut down for much of April and only resumed full output in early June. The recently opened Tesla Berlin and Austin plants are producing relatively few vehicles, partly due to supply-chain issues. The EV giant said June was a record month for production.
Some Giga Austin factory-made Model Ys boast a new structural battery pack and 4680 batteries. The 4680 batteries are not yet being mass produced, with Musk conceding on the Q2 earnings call that significant technical challenges remain.
Tesla is bringing a lower-range Model Y to Europe with much-lower prices than other Y trims. In some countries, the low-end Y costs less than the Model 3.
Tesla CEO Elon Musk is looking to back out of his deal to buy Twitter (TWTR). But Twitter won an early court ruling for an expedited trial in October. Legal experts say the social media company has a strong case.
Musk recently disclosed that he sold $6.9 billion in TSLA stock on Aug. 5, 8 and 9. He cited his ongoing legal fight.
“In the (hopefully unlikely) event that Twitter forces this deal to close (and) some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” he tweeted.
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Exxon Mobil stock is also worth considering. It is eyeing a consolidation pattern entry of 105.67, according to MarketSmith analysis.
XOM stock cleared a downward-sloping trendline entry and has some distance from its 50-day line. Ideally, Exxon would form a true handle to offer a lower buy point and let the 50-day line close the gap.
In addition, the relative strength line sits near new highs, an encouraging sign.
XOM stock has a very strong Composite Rating of 97. Stock market performance is bullish, with the stock rising 54% since the start of the year. Improving earnings performance gives added credibility to a bullish outlook on Exxon Mobil stock.
Oil prices surged as the West turns away from Russian supply, topping $130 a barrel. But U.S. crude futures recently tumbled below $90 a barrel before just recovering that level. Gasoline futures also have tumbled significantly. Natural gas prices, meanwhile, are near 14-year highs.
The Irving, Texas, based multinational is diversified across much of the petroleum industry spectrum. Operations range from exploration and production of crude oil and natural gas to refining and marketing fuels and petrochemicals. Exxon is one of the largest publicly traded companies in the energy sector.
Exxon Mobil earnings soared 276% to $4.14 per share in the second quarter. Sales spiked 70% to $115.7 billion. The oil major said this increase was primarily driven by a tight supply and high demand for oil, natural gas and refined products.
“Earnings and cash flow benefited from increased production, higher realizations, and tight cost control,” CEO Darren Woods said in a statement.
Exxon Mobil reports compressed markets across most of its business segments, including refined products such as gasoline, Woods said during the Q2 earnings call.
“We clearly see the tightness in supply and refining with a closure rate during the pandemic that was three times the rate of the 2008 financial crisis,” Woods said.
Capex totaled $4.6 billion in the quarter and $9.5 billion to date in 2022. The company said capital expenditures are in line with its full-year guidance of $21 billion to $24 billion.
The firm resumed buybacks in January, announcing $10 billion at the time.
On April 26, Exxon said it hiked its recoverable resource estimate for its Stabroek Block in offshore Guyana to 11-billion oil-equivalent barrels, thanks to three new discoveries at the site. The previous estimate was for 10 billion barrels.
But Exxon, like other oil companies, is appealing to ESG investors by earmarking funds to develop new business models to address climate change. Exxon has announced $15 billion in investments in its Low Carbon Solutions business.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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