Today I’d like to highlight 3 stocks that I now have on my watchlist to buy over the next couple of months. Since the Covid19 bear market, stocks have rebounded strongly. The powerful action reflects a rising confidence that the economy will eventually recover from the virus. Markets have risen as the Joe Biden passed his $1.9 trillion stimulus package through the senate this month.
3Stocks to Watch
Now obviously there are thousands of stocks being traded on the New York Stock Exchange, so how do you look for the ones that will return the biggest gains? I always invest in stocks with recent quarterly and annual earnings growth of at least 20 percent, and I look for companies that have new, innovative products and services. I also consider not-yet-profitable companies, often recent IPOs, that are generating high revenue and growth. Always 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 funding.
Disney stock is in buy range from a flat run off, after running past a buy 183 ahead of earnings. Shares reversed lower from a record high Friday following strong quarterly results, but were up solidly for the week. Disney stock has an RS Rating of 73 out of 99.Market performance is improving, with Disney stock rising almost 9% in the past month. Disney earnings have been badly hit by the coronavirus pandemic, with its Earnings per Share slipping to a poor 9 from 99. However, its been bouncing back after smashing analysts predictions. The surprise profit came as the number of streaming subscribers jumped. Disney Plus subscribers climbed to 95 million as of Jan 2nd, up 9% from 87 million at the start of December. During the pandemic, the streaming service has been a winner for Disney stock, and big plans are In place. The firm has surpassed 60 million Disney Plus subscribers worldwide, and 100 million subscribers. On Thursday, Disney CEO Bob Chapek said the new Star branded streaming service will launch internationally on Feb. 23rd. Star will be a sixth brand within Disney+ in some markets, joining the Pixar, Star Wars, Marvel and National Geographic lines.
At an Investor day on Dec. 11th, management said there are more than 100 titles in the works for Disney Plus, and the company expects to have 230 million-260 million Disney+ subscribers by 2024. That's up from its prior estimate of 60 million-90 million for the same time frame.
Bottom line on Disney, I expect a solid gain old 20% during 2021, and 12% in 2022.
MSFT stock is just above a buy point of 232, and It has been surging away from its 50 day moving average in the last week, and gaining more than 10% since the start of the year. Microsoft is one of only four U.S stocks with trillion-dollar market caps, and is nearing $2 trillion. In this case big is beautiful as Microsoft stock has a strong, but not ideal, Composite Rating of 88, which is designed to give an instant overview of a stock's fundamental and technical performance.
Microsoft's successful pivot into cloud computing has been driving growth, and it has benefited from the work-from-home and learn-at-home trends during the Covid-19 pandemic. Microsoft's cloud software and services are aiding at-home workers and college pupils.
Bottom line, I see Microsoft earnings rising by 30% in fiscal 2021 and by 10% in 2022.
Nvidia is solidly in the buy zone after breaking out of a flat base, and the buy point 587, cleared on Wednesday. However, the more-actionable entry of 560, cleared on Monday night.
The RS line for Nvidia looks to be turning positive again after a recent drop, which is common when a stock is consolidating in this way. Strong fundamental and technical performance has earned Nvidia stock an almost perfect Composite Rating of 97. Further strong earnings growth could be another catalyst for the Santa Clara based company as it plans financial results for its 4th quarter On 24th February.
Analysts are predicting that Nvidia will earn $2.80 a share, up 48% year over year, on sales of $4.8 billion. It also could be getting a near-term lift from graphics processing units being used for cryptocurrency mining. Bitcoin is trading near record-high levels. However, GPUs are in short supply and prices will "create a near-term demand driver that will soak up any excess supply of GPUs," Bradley Gastwirth, chief technology strategist for Wedbush Securities, said in a recent statement.
In my view, Nvidia should see a strong growth of 20% this year, and at least 15% in 2022.