You can review all of the companies on our Best Companies to Own list and dig into our methodology, which includes definitions for the key Morningstar metrics included in this article. Those with specific interests can drill down with our Best International Companies to Own, Best Sustainable Companies to Own, and Best Innovative Companies to Own lists, too. And as we outline here, we suggest that you focus your research on the undervalued stocks of the companies on these lists. Here’s a little bit about why we like each of these companies at these prices, along with some key Morningstar metrics.
What Is Growth Investing?
It had been as high as $2,500 per ounce before profit-taking knocked it down. Gold is up 15% in 2024, making Kinross Gold well positioned to take advantage. Disney’s ability to innovate and respond to changing consumer preferences has been evident throughout its history. The company’s pivot towards direct-to-consumer models, alongside its traditional revenue streams, showcases its ability to balance legacy operations with modern business practices. Disney’s commitment to diversity and inclusion in its content and corporate practices aligns with contemporary social values, enhancing its brand appeal and loyalty among global audiences.
Growth vs. Value Stocks
Alphabet is a global leader in internet search and online advertising, and it is the parent company of Google, Google Cloud, YouTube and other technology subsidiaries. Bank of America has a “buy” rating and $265 price target for PGR stock. Bank of America has a “buy” rating and $315 price target for SPOT stock. “The combination of highly visible revenue and moderating expense growth should enable the company to meet or exceed intermediate term (2-3 years) gross margin targets i.e. 30%+, with a longer term goal of 35%,” Ehrlich says. In addition to trading and investing he’s widely published and coaches individual clients on the finer points of gaining an edge in the market. Earnings per share have climbed in the past five years and are forecast to increase at nearly double that pace in the next five years.
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For each stock included on the list, analysts highlight unique catalysts that are likely to occur before the end of the quarter. Bank of America has a “buy” rating and $40 price target for KHC stock. Bank of America has a “buy” rating and $65 price target for C stock.
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But even then, higher rates could dampen the prospects of growth stocks for years to come. The Federal Reserve is committed to raising interest rates until U.S. inflation begins to cool off. That’s bad news for growth stocks, which suffer in a rising rate environment. Overvalued growth stocks can decline in value until they reach a price that reflects their fundamentals—avoiding these growth stocks is key. Consider both backward-looking reported sales growth in addition to forward-looking analyst expectations for future sales growth. Growth investing is a strategy that involves identifying stocks to buy based on the long-term expansion potential of their underlying businesses.
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. FIS is a fintech company that is unrelated to Fidelity Investments, a Boston-based brokerage and money management firm, whose parent is Fidelity Management & Research Company. Poonawala adds that Citigroup’s restructuring efforts should help the bank improve its operating efficiency.
MSFT grew by leaps and bounds in its early days—often in stiff competition with Apple—and it’s continued growing in more recent years, even after the exit of its founders. To help you take advantage of the massive opportunities in technology stocks, we’ve profiled the 10 largest companies that make up this sector by market capitalization. Baird analyst Catherine Ramsey Schulte, who rates the stock Outperform, the equivalent of a Buy. A diverse array of customers, including biopharma firms, hospitals, diagnostic labs, universities and research institutions, among others, helps. That’s no small task, given the broad and dynamic nature of the market.
However, the New York Fed’s recession probability model still estimates there’s a 58.3% chance of a U.S. recession within the next 12 months. In this volatile and unpredictable market, Bank of America recently compiled a list of their best stocks to buy now, which we profile below. Growth stocks may recover when the Fed has achieved its mission to tame inflation and ends rapid interest rate increases.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more. Dock David Treece is a former licensed investment advisor and member of the FINRA Small Firm Advisory Board. His focus is on breaking down complex financial topics so readers can make informed decisions.
This adaptability ensures that Disney remains relevant in an increasingly digital world. The Walt Disney Company, known as Disney, is a global entertainment conglomerate headquartered in Burbank, California. The company, founded on October 16, 1923, by Walt Disney and Roy O. Disney, has become one of the world’s most influential and diversified media enterprises.
Thus the weighted alpha is a measure of one year growth with an emphasis on the most recent price activity. At the other end of the ratings spectrum stands the Street’s highest recommendation of Strong Buy. A total of 23 stocks make the cut there, as you can see in the chart below. If the idea is to buy low, then going shopping for stocks when markets are reeling with volatility after setting a series of record highs might not seem all that appealing. But there are always select names set to outperform — and that’s especially true when market leadership is comparatively narrow.
The company will need high earnings growth to justify its current valuation. The stock is trading significantly below its 52-week high after declining through much of 2023. Shareholders tend to like that trend because it should help buoy individual investors’ profits by splitting them among fewer shares. The stock has performed admirably over the last decade, averaging 16.2% annual total return. The company has a “B” financial health rating and is trading at a P/E of 25.0.
- In fact, ASML has a near monopoly on making the photolithography machines employed by the global semiconductor industry, giving it an absolutely indispensable role in the global microprocessor supply chain.
- I’ve also prioritized stocks with fair valuations, avoiding overpriced assets to ensure the recommendations offer minimal risk and potential for attractive returns.
- The consensus price target for Diamondback’s shares is an average $222.04, which implies a gain of roughly 9% from the energy stock’s recent close.
- Headquartered in San Jose, Cali., Broadcom is one of the oldest and largest semiconductor manufacturers.
- And the shares trade at just 10.2 times the consensus of analysts’ expected earnings for the next 12 months.
It’s tough to generalize, but high interest rates make it more expensive for companies to borrow money, which can negatively impact their earnings and profitability. In addition, higher interest rates can also make bonds and other fixed-income investments more attractive to investors, drawing money away from the stock market. Investors use fundamental analysis and financial ratios to uncover a growth stock’s intrinsic value and compare it with the current market price. This can help them determine whether a growth stock is overvalued or undervalued. Generally, value stocks feature attractive fundamental metrics, such as low price-to-earnings (P/E) and price-to-sales ratios (P/S). Value stocks often have profitable businesses and pay relatively high dividend yields.
With that in mind, here are eight of the best stocks to buy now. The author or authors do not own shares in any securities mentioned in this article. Sign in here and you’ll be redirected back to this page to access the full stock data.
If a growth stock shows signs of slowing or stagnating growth, growth investors can exit a stock all at once, triggering a steep decline. Growth investors are often willing to buy stocks with high P/E or P/S ratios based on the expectation that the companies will eventually grow into and beyond their current valuation. Growth stocks tend to be more volatile than the broader market, and investors often sell growth stocks during periods of uncertainty in the market.
UnitedHealth, Emerson Electric and Microsoft top the list of stocks scoring rare Strong Buy consensus ratings. Regulators can change the landscape for emerging technologies rapidly when things go wrong. Data breaches, revelations about data collection and other headlines spur regulators to pass new laws and regulations that can impede future tech sector growth. “We remain intrigued by the generational increase in funding” for projects driven by the Infrastructure Investment and Jobs Act of 2021, write analysts at investment firm Raymond James.
A stock whose price has not changed in the period will have a small Weighted Alpha and a stock whose price has dropped over the period will have a negative Weighted Alpha. He’s also written for Esquire magazine’s Dubious Achievements Awards. The author owned shares of Apple Inc. when this article was published.