The 5 Best Stocks To Buy And Watch Right Now (2024)

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?Microsoft (MSFT), Ares Management (ARES), Eli Lilly (LLY), Uber Technologies (UBER) and East West Bancorp (EWBC) are prime candidates.

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Inflation and the Federal Reserve tightening rates aggressively worried investors last year. But the market confounded expectations for difficulties and turned in an outstanding performance in 2023. More moderate gains are expected for 2024, but the benchmark amid growing confidence the Fed will reach its goal of a soft landing.

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 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.

CAN SLIMhas a proven track record of significantly outperforming the 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 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 towin big on the stock market, can be found here.

Don't Forget The M When Buying 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 uptrendand move to cash when the stock market goes into a correction.

The stock market turned in stunning gains in 2023 and will now look to build on those gains. Indexes are looking strong, with the Nasdaq and the S&P 500 remaining above the key 50-day moving average. Additionally, the S&P 500 and the Nasdaq recently hit fresh record highs.

The stock market is back in a confirmed uptrend, though there have been a number of distribution days lately. Now is a good time for investors to make stock purchases. It's also a good time to add to existing holdings at follow-on opportunities. IBD is currently recommending 60% to 80% market exposure.

Investors should take care to invest in high-quality stocks. The selections below are among the best stocks to buy or watch now. The IBD 50 is also a rich hunting ground.

Despite the market going back into a confirmed uptrend, 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.

Remember, there is still significant headline risk. Inflation could still be an issue, while the Russia-Ukraine conflict is a wild card that has proved its ability to shake the market. The current issues in Israel add even more uncertainty.

Things can quickly change 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

• Microsoft
• Ares Management
• Eli Lilly
• Uber Technologies
• East West Bancorp

Now let's look at Microsoft stock, Ares Management stock, Eli Lilly stock, Uber stock and East West Bancorp stock in more detail. An important consideration is that these best stocks to buy and watch all boast impressive relative strength.

MicrosoftStock

Microsoft stock was actionable as it rebounded off the 10-week moving average, MarketSurge analysis shows. It is currently actionable from a short consolidation that was just too short to qualify as a flat base. The ideal entry point here is 420.82, and the buy zone tops out at 441.86.

Therelative strength line has been moving sideways since late November. Microsoft stock is in the top 14% of issues in terms of price performance over the last 12 months.

Overall impressive performance is reflected in MSFT's strong IBD Composite Rating of 90 out of 99.

Microsoft has seen EPS grow by an average of 25% over the past three quarters, which meets CAN SLIM requirements. In addition, earnings have grown by an average of 14% over the past three years, impressive growth for such a large firm. They are seen growing a further 19% in 2024 and by 15% in 2025.

Big Money players have been net buyers of MSFT stock of late, with its Accumulation/Distribution Rating coming in at B-.

In late January, the Redmond, Wash.-based firm reported that earnings per share had popped 33% to $2.93 as revenue climbed 18% to $61.1 billion for the most recent quarter. Microsoft Cloud revenue rose 24% year over year to $33.7 billion in the September quarter.

CEO Satya Nadella boasted about the firm'sartificial intelligenceinitiatives following the results.

"We've moved from talking about AI to applying AI at scale," Nadella said in a statement. "By infusing AI across every layer of our tech stack, we're winning new customers and helping drive new benefits and productivity gains across every sector."

Microsoftrecentlyunveiled its own AI chip, the Azure Maia AI Accelerator, to ease its dependence on Nvidia GPUs. It is designed to run generative AI and other AI workloads, including large language model training and inference. The firm plans to roll out Maia to its data centers early next year.

It remains to be seen whether moves to adopt a vertical integration approach by Microsoft,Apple (AAPL) and others could be a longer-term threat to chipmakers like Nvidia and Advanced Micro Devices (AMD).

Microsoft has been making good progress since it showed off its new Bing search engine and Edge web browserthat use AI technology.Microsoft hopes the OpenAI-based technology can help Bing chip away at Google's dominance in the internet search market. The stock was given a flurry ofprice-target hikes from analysts after the presentation.

The firm kept up the momentum by adding artificial intelligence tools to its popular Office productivity applications.

This comes after Microsoft announced an investment reportedly worth $10 billion in artificial intelligence startup OpenAI.

The software giant is providing its Azure cloud computing infrastructure for OpenAI. It also is adding OpenAI models to its consumer and enterprise software products.

Microsoft may have strengthened its OpenAI position after the AI startup ousted and then brought back CEO Sam Altman in a five-day span. Microsoft has said that Copilot for Security, a generative AI cybersecurity tool, will launch April 1.

As if that wasn't enough, the tech giant unveiled Surface AI PCs and showed off Copilot functionality at its "New Era Of Work" event on March 21.

Excellent sustained performance has won Microsoftstock a spot in theIBD Long-Term Leaders Portfolio.

Ares Management Stock

ARES stock has formed a flat base with an ideal buy point of 139.48. It's testing support at its 21-day exponential moving average, an important shorter term benchmark.

Ares also offered an early buying opportunity as it broke the trendline sloping down from its Feb. 8 high, though it backed off. At this point, the March 21 high of 137.88 might be a better early entry, which would also clear some short-term levels.

Overall performance is very strong, with its IBD Composite Rating coming in at 95. Earnings performance is particularly strong too, with ARES stock holding an EPS Rating of 97 out of 99.

ARES has been doing very well on the stock market over the past 12 months. It is in the top 12% of issues over that period.

Ares is a diversified alternative asset manager, engaged in direct lending, private equity and investment in infrastructure and real estate. The firm is looking to put $111 billion in dry powder to work as it looks to maintain fast earnings growth.

Ares was cofounded in 1997 by Tony Ressler, who also cofounded Apollo Global Management.

The firm's assets under management grew 19% to $418.8 billion in Q4, helping to drive a 39% increase in EPS per class-A share to 86 cents.

On the Q4 earnings call, CEO Michael Arougheti said that Ares had its second-largest fundraising year despite a difficult year for fundraising across its industry. "We entered 2024 in the enviable position of having more than $110 billion in dry power to invest in what we believe is an attractive vintage, providing the opportunity to drive strong earnings growth in the years ahead."

The firm is underweight in office buildings, which comprise just 4% of its real estate portfolio. But the company recently formed a joint venture to invest in "high-quality distressed office buildings in New York," looking for favorable deals amid scarce capital for that particular asset.

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

Eli Lilly Stock

A potential chance is emerging to buy obesity play Eli Lilly as it firms up near a buy point despite expanding competition.

Shares are crafting aflat basewith an idealbuy point of 800.78. Aggressive investors could consider buying an early entry above the 21-day line.

Obesity plays have been some of the most rewardingstocks to own for investors amid recent scientific progress in the field.

The firm, which has been boosted by enthusiasm for its weight-loss drug Zepbound, has seen itsstock price swell an impressive 33% so far this year.

LLY stock has anIBD Composite Rating of 92 out of 99. Meanwhile, it holds an EPS Rating of 65 out of 99.EPS grew by 19% in the most recent quarter.

Eli Lilly ranks second in the competitiveMedical-Diversified industry group. There has been slightly more buying than selling among institutions of late, with itsAccumulation/Distribution Rating coming in at C+. In total, 40% of its stock is held by funds,according to MarketSmith data.

But despiteViking Therapeutics (VKTK) this week saying its own experimental pill helped patients lose up to 5.3% of their body weight using the same mechanism as Lilly's offering, UBS analyst Trung Huynh said the test results are unlikely to faze leaders Lilly and rivalNovo Nordisk (NVO). NVO is a member of the IBD Leaderboard list of top stocks.

"Although the data look promising, we notethe early Phase 1 study is in a small population," he said in a report. "A Phase 2 trial in obesity is planned for the second half of 2024. Nevertheless, we acknowledge increasingly viable competition in the GLP-1 space for the Lilly/Novo duopoly, but we ultimately believe near- and midterm impacts are limited."

Both Lilly's and Viking's treatment block hormones called GLP-1 and GIP to slow how fast the stomach empties itself and improve feelings of fullness.

Nevertheless, Viking faces stiff competition as LLY and NVO both sell approved weight-loss injections and are working on pills. Analysts surveyed by FactSet expect the duo to bring in a combined $12.48 billion in sales this year, growing to $37.72 billion in 2029.

ButEli Lilly has many strings to its bow. Among potential offerings that have excited investors is a gene therapy that could restore hearing loss.

Uber Stock

Among the best stocks to buy and watch currently,Uber has formed a flat base with an ideal buy point of 81.86. This is a third-stage pattern.

The stock is trading comfortably above its 10-week moving average. The 21-day line has been acting as an area of support as it continues its ascent, though it testing the level currently. The relative strength line is still near highs.

Overall performance is strong, withUber stock's IBD Composite Rating coming in at a best-possible 99. It is in the top 4% of stocks in terms of price performance over the past 12 months.

Big Money has been a net buyer of the stock of late, with itsAccumulation/Distribution Rating coming in at A-.

The company benefited during the pandemic from the firm's range of transportation and delivery services. This helped offset a sharp decline in the ride-sharing business during this period.

Now the ride-sharing business is back in the driver's seat. On Feb. 7 the firm reported 128% EPS growth to 66 cents as revenue popped 15% to $9.94 billion in Q4. It bested analyst expectations on both counts.

Now Wall Street expects EPS growth of 123% in 2024 and 44% in 2025. Further boosting the stock was the announcement on Feb. 14. the firm plans to buy back up to $7 billion worth of stock.

Uber Chief Executive Dara Khosrowshahi had hinted Uber was planning a buyback last fall. It made the move official ahead of its virtual investor day.

The company also offered new projections for the next three years. Over that period, Uber projects annual gross bookings growth in the mid-to-high teens. Gross bookings are the total dollar value of fares charged for transportation, food delivery and other services.

Further, the company said it expects adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — to grow in the "high 30s to 40%" annually over the next three years, as the company described in a regulatory filing.

Following the report, JPMorgan maintained a positive overweight rating for Uber stock and upped its target price to 95 from 84.

"We continue to believe that Uber's scale and platform advantages will help drive large, sustainable growth opportunities across Mobility and Delivery, while generating strong EBITDA and free cash flow," JPMorgan analyst Doug Anmuth said in a research note.

In 2021, the company launchedUberOne, a membership program that offers discounts on food delivery. There also are perks for using its ride-sharing business.

Stock Market Strong: Will IPO AI Stock Offer A New Entry?

East West Bancorp

East West Bancorp is in a buy zone after clearing a flat base entry point of 76.88. This is a first-stage pattern, which means it is more likely to net good gains.

The stock is trading above its short-term and its major moving averages, a bullish look. Its relative strength line is also trying to bend upwards.

Overall performance is solid, but not ideal. This is reflected in its IBD Composite Rating of 80 out of 99. But it is in the top 10% of stocks in terms of price performance over the past 12 months

Earnings is currently the Achilles heel. It holds an EPS Rating of 73 out of 99. But while earnings are seen dipping 8% in 2024, they are seen rebounding to 5% growth in 2025, according to MarketSurge data.

East West is headquartered in Pasadena, Calif. Its business segments include Business Banking and Commercial Banking.

The company is noteworthy for the fact it is a full-service commercial bank with cross-border operations concentrated in the U.S. and China.

Because of its cultural and regulatory knowledge of the two economic powerhouses, it is able to help customers enter and operate in these markets.

It has served as a banking midwife for entertainment partnerships between participants in China and Hollywood. The bulk of these efforts include financing the production and distribution of film and television projects.

Much of the company's earning assets are in loans held for investment.

The firm is led by President and CEO Dominic Ng, a Hong Kong-born American banker who was appointed by the Biden administration to be a U.S. member of the Asia-Pacific Economic Cooperation Business Advisory Council. He served as the council's chair in 2023.

Ng helped facilitate deals such as Perfect World's $250 million investment in a slate of Universal movies as well as helping fund the likes of the "The Martian" and "The Hunger Games."

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

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