While buying stocks is easy, knowing the best stocks to invest in right now without a time-tested strategy can be very difficult. Software stocks and other growth stocks that have high price-earnings ratios have led the stock market for the majority of 2019, however recently have experienced serious damage.
Meanwhile, lower P/E stocks such as small caps, financials, and retailers have increased their positions while chip stocks have started rebounding. Superior fundamentals, technical action, and purchasing at the right time are all components of a shrewd investment formula that helps investors determine what stocks to buy now.
- Best stocks to invest in right now for beginners – Amazon.com, Alphabet, Facebook, Intuitive Surgical
- Best cheap stocks to invest in right now – Kinross Gold, Infosys, Tegna, Vereit
- Best growth stocks to buy right now – iRobot, Lululemon, Wayfair, Netflix
Best Stocks to Invest in Right Now for Beginners
The large market capitalizations of these companies reflect that the market realizes their significance. Its typically suggested that new investors stick to well-known, large-cap stocks that have strong brand recognition to begin their investing journey rather than experimenting with under-the-radar smaller cap stocks.
With strong balance sheets, competitive advantages, and positive free cash flow, these four stocks are especially good stocks for new investors to buy right now:
- Amazon.com (AMZN)
Amazon is dominating the online retail industry, with nearly half of the eCommerce business in the U.S and over 100 million Americans paying $119/year to be an Amazon Prime member. But that’s not even where Amazon makes the majority of its profits. Those come from Amazon Web Services. Amazon even throws in additional goodies, including original content, subsidiaries such as the high-end organic retailer Whole Foods, and the live streaming gaming-related video platform Twitch.
- Alphabet (GOOGL)
Google owner Alphabet is just as impressive with a search engine that is better described as a “money engine.” With 90% of the worldwide market, including the world’s #1 video platform YouTube and the #1 mobile operating system Android. The Alphabet umbrella also includes other “alpha bets” and several futuristic moonshots resulting in Google being involved in everything from artificial intelligence (AI) to drones to virtual reality to driverless cars.
- Facebook (FB)
Finishing up the FAANG companies for beginners is Facebook, the king and queen of social media with the Facebook, WhatsApp, Facebook Messenger, and Instagram platforms, with each of them accounting for a minimum of a billion users each month. Considering the world population is in single-digit billions. This is an impressive feat. Amazon.com, Alphabet, and Facebook are all “FAANG” stocks, Big Tech companies that seem to have their hands in everything and the potential to disrupt even the parts of the economy they aren’t directly involved with.
- Intuitive Surgical (ISRG)
Moving from Big Tech to medical, Intuitive Surgical is a healthcare pioneer that made robotic surgery a reality thanks to its da Vinci surgical systems. Assisting surgeons in making surgical procedures less invasive and resulting in improved patient outcomes. With billions in annual sales already, Intuitive Surgical has been consistently profitable with gross margins in the 60%-70% range and net margins in the 20%-30% range. Investors are easily seeing a forward growth path as more hospitals and surgeons adopt this technology, and more procedures are approved.
Best Cheap Stocks to Invest in Right Now
Traditionally cheap stocks, those trading for under $10 a share, see higher liquidity resulting in narrower bid-ask spreads and confidence that investors will be able to sell them when needed. Below are four best cheap stocks to invest in right now:
- Kinross Gold (ticker: KGC)
Despite improving 50% or more year-to-date, Kinross Gold, the Canadian gold and silver miner, is still trading near $5 a share, making it one of the cheapest stocks to buy on this list. With a worth in excess of $6 billion, Kinross Gold’s shares trade for around 19 times forward earnings.Both silver and gold prices have been rising in 2019; falling interest rates, trade war uncertainty, and slowing global growth have all helped this precious metals rally. This often happens as investors look for safe-haven investments in groups.
- Infosys (INFY)
Stock market investors are fortunate to have such a strong company trading at this incredibly affordable per-share price. Valued over $47 billion, this India-based IT company provides a suite of outsourcing consulting and tech services to a range of sectors including manufacturing, energy, communication, retail, and financial services. Infosys revenue increased 14% last quarter, $12 billion in annual revenue, and strong net margins. This company pays a 2.2% dividend.
- Tegna (TGNA)
Tegna, a media powerhouse, manages around 50 radio and TV stations in over 40 markets. Tegna fetches a price-earnings ratio below 8, a forward P/E under 7, and trades shares at shockingly low multiples. Shares get these low multiples despite an expected 20% revenue growth in the next fiscal year, along with strong expected earnings growth. Tegna is still one of the best cheap stocks to purchase, even after 30% gains in 2019 and especially after the mid-August news of Apolool Global Management (APO) approaching them, hoping to acquire them.
- Vereit (VER)
The only real estate investment trust (REIT) on our best cheap stocks to invest in list, Vereit has a value of more than $9 billion. The owner of a large, diversified portfolio of single-tenant real estate properties, Vereit’s lease structuring and careful tenant selection allows them to avoid large degrees of cash flow uncertainties. Recently, it bought three fulfillment centers Amazon.com utilizes to complete online orders, providing nice exposure to the ever-popular eCommerce space.
Best Growth Stocks to Buy Right Now
Growth stocks typically pass along very little, if any, of their earnings as dividends to investors. Most of these companies are usually in the pre-earning stage of development or have such minimal earnings resulting in stratospheric P/E ratios. Any earnings that are made are typically put back into the company. Below are four of the best growth stocks to buy right now:
- iRobot (IRBT)
Known for the Roomba family of robotic vacuum cleaners, iRobot has bulls pointing to its large optionality potential while bears are a little more hesitant, worrying about increasing competition. Already adding robotic lawnmowers to its lineup, most anticipate iRobot will continue adding other commercial and household appliances. Speculating on exactly what iRobot will become is difficult. While it’s boosting just over a $3 billion market cap, it’s still less than 1% of others, including Amazon, Facebook, and Alphabet, giving iRobot stock lots of room for growth.
- Lululemon Athletica (LULU)
Catapulting from its base of yoga apparel, Lululemon has become a solid competitor in the athleisure wear industry. Some debate whether the athleisure trend of wearing spandex similar to how others wear denim will weather time or start to fizzle out. While this may affect short-term growth, there will always be a need for fitness apparel.Lululemon also has the opportunity to increase it’s presence internationally. A Canadian company, 70% of Lululemon’s current sales come from the U.S., with only 10% of sales coming from Canada and other areas outside the U.S. Expanding beyond its current female-targeted demographic is also another growth driver it can consider.
- Wayfair (W)
Another online retailer, Wayfair, focuses on cookware, furniture, and lighting for both indoor and outdoor living areas. Retail is a tough industry to be in, and Wayfair faces fierce competition from online giants such as Amazon, other smaller boutique online start-ups, and traditional brick and mortar retailers. Investors banking on Wayfair’s success look for them to continue building up their brand and customer loyalty while scaling appropriately in order to boost their margins to a point where they can provide a sustainable profit. Many point to Wayfair’s nearly 50% sales growth rate over the last five years.
- Netflix (NFLX)
After vanquishing its main competitor, Blockbuster, pivoting from sending DVDs in the mail to online streaming, creating award-winning content, and keeping total content costs low enough to make a profit consistently, Netflix needs no introduction. With pricing and brand power, most Netflix investors minimize the worry of increasing costs for content, domestic saturation, or competition, including other online streaming providers with formidable content owners, by pointing to the number of homeowners breaking away from traditional cable favoring memberships to several online streaming services.
Having a solid strategy for determining the best stocks to invest in right now is essential to be a successful trader in today’s markets. Learn more about how to improve your investing strategy and increasing your investment account by scheduling a free online training session with one of the trainers from Raging Bull’s team of millionaire experts and traders.