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, Berkshire Hathaway (BRKB), Exxon Mobil (XOM) and JPMorgan Chase (GE) are standout performers, at least relatively.
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 overall has been choppy since then, with bear market rallies often being undercut by painful drawdowns. The S&P 500, the Nasdaq and the Dow Jones Industrial Average rebounded following the latest jobs report. The bullish action continued when stocks rallied on the December consumer price index report. Big tech layoffs helped stocks end a difficult week on a high on Friday.
The stock market is now back in a confirmed uptrend. With earnings season kicking off, investors should raise exposure at a measured pace. A confirmed uptrend is when investors should make most stock purchases. It’s also a good time to add to existing holdings at follow-on opportunities, such as support at the 50-day moving average or at the 10-week moving average.
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.
A good way to stay engaged is to build up one’s watchlist of potentially actionable stocks. Focus on fundamentally strong stocks coming out of sound chart patterns, such as those in the IBD 50. These names will tend to have rising relative strength lines. The stocks below are good candidates.
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 Berkshire Hathaway stock, Exxon stock and JPMorgan Chase 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.
Looking For The Next Big Stock Market Winners? Start With These 3 Steps
Berkshire Hathaway Stock
The ultimate Warren Buffett stock is one to watch for now as it seeks support near its 50-day moving average. It is trying to reach a new cup-with-handle buy point of 231.42.
Shares are above their 50-day and 200-day lines.
BRKB stock’s relative strength line has edged lower but is still close to a 52-week high.
BRKB stock has seen its IBD Composite Rating shoot up to a solid 79 out of 99. Unlike many stocks, Berkshire Hathaway stock held strong in 2022 making a slight gain compared to a loss of more than 19% for the S&P 500.
It boasts a good mix of stock market and earnings performance. Earnings have been picking up, with the stock holding a strong EPS Rating of 93 out of 99. Earnings popped by 23% in the most recent quarter. They have grown by an average of 24% over the previous three quarters.
Berkshire Hathaway is a conglomerate that owns some of America’s most famous firms. It wholly owns the likes of Geico, Duracell, Dairy Queen, Fruit of the Loom and railroad operator BNSF.
Berkshire Hathaway is perhaps more famous for serving as an investment vehicle for Warren Buffett and his top lieutenant, Charlie Munger. Following their value investing philosophy, the company owns huge stakes in American Express (AXP), Coca-Cola (KO) and other heavy hitters.
Under investment managers Todd Combs and Ted Weschler, Berkshire Hathaway has been increasingly sinking money into tech. It’s taken large positions in established giants like Apple (AAPL), as well as younger companies like Brazilian payments company StoneCo (STNE) and software firm Snowflake (SNOW). Berkshire also snapped up a stake in Amazon.com (AMZN).
In Q3, Berkshire Hathaway snapped up a big stake in Taiwan Semiconductor (TSM), the world’s largest contract chipmaker. It is a big supplier to Apple, his firm’s top holding.
Warren Buffett opened up new positions in building products maker Louisiana Pacific (LPX), and Jefferies Financial (JEF), a global investment banking and capital markets firm.
Warren Buffett is also a player in the streaming wars, increasing his position in Paramount Global (PARA) by 16%. The Paramount+ streaming service is a small but growing rival to Netflix, Disney+ and Amazon Prime.
One of the biggest questions around the future of Berkshire Hathaway in recent years was who would take over the mantle of CEO from Buffett.
The Oracle of Omaha has finally given the answer. He said Greg Abel, who runs the noninsurance businesses, will take over in his stead.
CFRA analyst Catherine Seifert is rating BRKB stock as a hold with a 325 price target.
“Berkshire’s premium valuation – versus the broader market and the company’s historical averages – is dependent upon its ability to produce revenue growth and operating profit margins that are superior to broader averages,” she said in a Nov. 7 research note.
She also expects the firm to deploy its massive cash pile going forward. She said she sees “aquisitions and/or share buybacks remaining part of Berkshire’s capital allocation strategy.”
Exxon Mobil stock is closing in on a flat base buy point of 114.76.
Shares fell back below their 50-day line on Jan. 3 as tumbling oil and gas prices hit energy stocks. They have now retaken this key level. U.S. crude oil prices on Friday hovered near $81 per barrel. U.S. crude oil futures have regained support above their 50-day moving average line, after settling above that line on Tuesday for the first time since mid-November.
Investors could have used its retaking of the 50-day moving average, which broke a downtrend starting on Nov. 25, as an early entry. The relative strength line is just off highs.
XOM stock has a near-perfect IBD Composite Rating of 97. Stock market performance is bullish, with the stock rising about 80% in 2022. Whether such performance can be maintained this year is a big challenge for Exxon Mobil stock.
Oil prices surged as the West turns away from Russian supply, topping $130 a barrel.
One reason to be cautious is XOM is set to post earnings on Jan 31. An approach highlighted by Investor’s Business Daily is to use options as a strategy to reduce risk around earnings. It’s a way to capitalize on the upside potential of a stock’s move around earnings, while reducing the downside risk.
Irving, Texas-based Exxon is diversified across much of the oil and gas 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.
That diversity can reduce volatility, but natural gas and gasoline prices also have come down significantly.
Exxon reported earnings surged 181% to $4.45 per share in Q3 while revenue jumped 52% to $112.1 billion. These were both above analyst views.
Capital and exploration expenditures came in at $5.7 billion in the third quarter. So far in 2022 XOM has spent $15.2 billion, which the company says is on track with full-year guidance of $21 billion-$24 billion.
Oil-equivalent production in the third quarter was 3.7 million barrels per day, up more than 50,000 oil-equivalent barrels per day from Q2.
Exxon Mobil also announced a fourth-quarter dividend of 91 cents per share, an increase of 3 cents per share. The company said it plans to pay out $15 billion in aggregate for the year.
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.
10 Big Earnings On Tap Amid Market Rally
JPMorgan Chase Stock
JPM stock is just below a buy zone after previously clearing a flat base buy point of 138.76. This is the stock’s first breakout in more than a year. The current buy zone extends to 145.69.
The relative strength line remains at around highs, an encouraging sign. The stock is finding support near the 10-week moving average.
The latest pattern comes within a larger cup base with a higher entry point of 173.06.
Overall performance is excellent, which is reflected in its near-perfect IBD Composite Rating of 94. Both earnings and stock market performance are solid.
One reason JPM stock is a one of the best Robinhood stocks to buy or watch now is the fact it has got over the hurdle of earnings.
It posted results last week. JPMorgan earnings rose 7% to $3.57 per share and reported revenue grew 18% to $34.5 billion. Net interest income also spiked 48% to $20.3 billion, exceeding forecasts of 39% growth to $19.1 billion and marking the fifth straight quarterly gain.
Analysts had predicted JPMorgan earnings would slide 6.3% to $3.12 per share on 17.5% revenue growth to $34.3 billion, according to FactSet.
Consumer banking revenue increased 29% to $15.8 billion and just beat estimates of $15.6 billion. Meanwhile, JPMorgan’s consumer and investment banking revenue dipped 9% to $10.5 billion, coming in lower than the expected $10.8 billion.
Morningstar analyst Eric Compton is rating the stock as a hold with a 146 target. He said “2023 outlook is good” for the company.
“With leading investment bank, commercial bank, credit card, retail bank, and asset and wealth management franchises, JPMorgan is truly a force to be reckoned with,” he said in a note to clients. “The bank’s combination of scale, diversification, and sound risk management seems like a simple path to competitive advantage, but few other firms have been able to execute a similar strategy.”
He also said the firm has “managed to seemingly put all the pieces together in a more cohesive and less error prone way than peers.”
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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