Best Stocks To Buy And Watch Now: 5 Top Stocks For October Golie Mark

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? Eli Lilly (LLY), Exxon Mobil (XOM), Neurocrine Biosciences (NBIX), Cardinal Health (CAH) and Texas Roadhouse (TXRH) are prime candidates.


With inflation worries high, and the Federal Reserve tightening rates aggressively, market action has been challenging so far in 2022. The Russian invasion of Ukraine also continues to weigh on markets.

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.

IBD’s CAN SLIM Investing System has 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 to win 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 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. While the market battled back amid a better than expected earnings season, the latest uptrend failed amid disappointing inflation data, which came on the heels of Federal Reserve Chairman Jerome Powell’s hawkish Jackson Hole speech. The S&P 500, the Nasdaq and the Dow Jones Industrial Average have all sunk below their 50-day moving averages and are near lows for the year.

With the market back in a correction now is a time to avoid making any new buys. This will help prevent you getting sucked into a bear market trap. Reversals can be particularly severe at this time. Instead, now is a good time to build a watchlist of exceptional stocks such as those in the IBD 50. These names will tend to have rising relative strength lines. The stocks below are good candidates.

It is a good time to consider taking profits. In addition, 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.

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 Stocks To Buy Or Watch

  • Eli Lilly
  • Exxon
  • Neurocrine Biosciences
  • Cardinal Health
  • Texas Roadhouse

Now let’s look at Eli Lilly stock, Exxon stock, Neurocrine Biosciences stock, Cardinal Health stock and Texas Roadhouse stock in more detail. An important consideration is that these stocks all boast impressive relative strength.

Eli Lilly Stock

LLY stock is in a flat-base buy zone after previously clearing an ideal buy point of 335.43, according to MarketSmith analysis.

Shares have retaken the 50-day moving average, a bullish sign. The relative strength line also sits near new highs.

Eli Lilly stock has been faring very well on the stock market. In fact, it is in the top 6% of stocks in terms of price performance over the past 12 months.

The diversified medical stock also boasts solid earnings. It currently holds an EPS Rating of 86 out of 99.

Analysts are particularly keen on its drugs Mounjaro and donanemab. Lilly already has approval for Mounjaro in patients with Type 2 diabetes. But the company is also testing it in patients with obesity and related cardiovascular/metabolic conditions. Lilly also is working in Alzheimer’s with donanemab.

Mounjaro is the first in its class. It targets two hormones tied to blood sugar control. The Food and Drug Administration approved it for diabetes treatment in May.

“Mounjaro could be the biggest drug ever,” UBS analyst Colin Bristow said in a report Thursday. He also sees LLY stock as the “best way to play” upcoming data from rival Biogen (BIIB) in Alzheimer’s disease treatment.

Bristow upgraded LLY stock to a buy and raised his price target to 363 from 335.

It is just a part of a suite of diabetes medicines sold by Eli Lilly. Mounjaro is becoming a more important portion of the group. For the week ended Sept. 16, prescriptions for Mounjaro accounted for 22% of all of Lilly’s diabetes medicines, according to SVB Securities analyst David Risinger.

However he also said sale of LLY’s most popular diabetes treatment Trulicity are continuing to grow despite very strong initial Mounjaro uptake.

In addition, UBS’s Bristow has called Lilly’s donanemab “the highest potential late-stage Alzheimer’s asset.” Lilly spokeswoman Kristen Basu said a Phase 3 study that aims to confirm donanemab’s benefits in mid-2023.

Lilly popped recently after Biogen reported strong late-stage trial results for a similar Alzheimer’s drug.

Exxon Stock

Exxon Mobil stock has formed a handle with a consolidation. It now sits just above its ideal buy point of 103.42.

It has bullishly retaken the 50-day moving average after finding support at the 200-day line. The relative strength line remains near new highs and is bending upward.

XOM stock has a perfect IBD Composite Rating of 99. Stock market performance is bullish, with the stock rising about 67% since the start of the year. Improving earnings performance gives added credibility to a bullish outlook on Exxon Mobil stock.

Oil prices surged as the West turns away from Russian supply, topping $130 a barrel. U.S. crude futures recently plunged to $80, their lowest level since January, but then rebounded earlier this month as OPEC and key allies agreed to steep production cuts of 2 million barrels a day.

XOM and other oil stocks were boosted after crude oil futures skyrocketed. Exxon also issued a bullish Q3 update.

Then last week, oil prices drifted lower amid renewed demand concerns. That let XOM stock form its handle.

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 Mobil earnings soared 276% to $4.14 per share in the second quarter. Sales spiked 70% to $115.7 billion. The oil major said this increase was primarily driven by a tight supply and high demand for oil, natural gas and refined products.

“Earnings and cash flow benefited from increased production, higher realizations, and tight cost control,” CEO Darren Woods said in a statement.

Exxon Mobil reports compressed markets across most of its business segments, including refined products such as gasoline, Woods said during the Q2 earnings call.

“We clearly see the tightness in supply and refining with a closure rate during the pandemic that was three times the rate of the 2008 financial crisis,” Woods said.

Capex totaled $4.6 billion in the quarter and $9.5 billion to date in 2022. The company said capital expenditures are in line with its full-year guidance of $21 billion to $24 billion.

The firm resumed buybacks in January, announcing $10 billion at the time.

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.

Neurocrine Biosciences Stock

NBIX stock currently sits in a buy zone above a flat base entry of 109.36.

The relative strength line has just hit a new high. Neurocrine Biosciences stock previously rebounded from just above its 10-week line, an encouraging sign. It has managed to hold above this key level after a recent test.

There are reasons for optimism. Firstly, biotech stocks are currently showing strength, with the industry group ranking seventh out of 197 groups tracked by IBD.

NBIX stock also boasts good all-around performance, which is underlined by its very strong IBD Composite Rating of 96.

Earnings are solid, its EPS Rating coming in at 81 out of 99, while it is in the top 7% of stocks tracked in terms of price performance over the past 12 months.

Analysts expect profit growth to ramp up in 2023, with full year EPS expected to pop 91%.

The company recently scrapped a high-profile treatment for essential tremor. Typically, a move like that would tank a biotech stock.

Instead, NBIX stock surged. It has held the bulk of those gains, even as Wall Street feels the pangs of a lower-than-expected jobs report and the continued worry of rising interest rates.

This is perhaps due to the fact it has plenty of other potential winners in the pipeline, according to analysts.

Mizuho Securities analyst Uy Ear notes Neurocrine also is testing the same drug that failed to help essential tremor patients in patients with a form of pediatric epilepsy. He expects early test results from that effort this year. Further, Neurocrine is expected to soon ask U.S. regulators to approve Ingrezza for Huntington’s disease patients with movement complications.

Neurocrine also expects to begin studies in schizophrenia and an undisclosed disease this year. The company also could have test results for depression and seizure treatments next year.

“Looking into 2023, we see more room for optimism with top-line readouts expected across multiple mid- and late-stage programs,” Ear said in a report to clients. He kept his neutral rating on NBIX stock, but raised his price target to 98 from 95.

Wedbush analyst Laura Chico is watching a drug called crinecerfont. Neurocrine is testing it in patients with an inherited disorder of the adrenal glands that affects growth and development. Neurocrine is on track to release additional testing data in 2023, she said in her note to clients.

During the June quarter, Neurocrine’s biggest moneymaker, Ingrezza, brought in $350 million in net sales. Ingrezza treats an involuntary movement disorder called tardive dyskinesia. Sales surged by a double-digit percentage and beat expectations.

Neurocrine also sells a Parkinson’s disease med called Ongentys and two women’s health drugs with AbbVie (ABBV).

Cardinal Health Stock

Cardinal Health is in its buy zone after passing a new flat base entry point of 72.38. This is a first stage pattern.

The stock is moving higher after testing its 50-day and 10-week moving averages again. It previously flashed early entries after bouncing from these levels for the first time since an early August breakout. Market conditions raise the risks of any buys.

The RS line in particular is impressive for CAH stock. It has been generally been spiking upward since early July, and is rebounding sharply after a brief decline.

Cardinal Health has been attracting attention from institutional investors of late. In total. 55% of its stock is held by funds.

Highly rated holders include the DFA TA US Core Equity 2 Fund (DFTCX) and the SEI Institutional Investments Trust Dynamic Asset Allocation Fund (SDLAX).

All-around performance is strong, with its Composite Rating a healthy 93. Earnings are not ideal, but it ended a five quarter period of declining EPS in the most recent quarter.

As a company within the highly defensive wholesale drug and supply industry, CAH has made its case as a less volatile growth stock.

It has been finding support following after a heavy-volume breakout from a cup base in August. The breakout marks Cardinal’s best short-term action in years.

A weekly chart or monthly chart highlights how CAH has actually been a stubborn laggard since the start of 2018. And the monthly chart shows the stock breaking a nearly 7-year downtrend in magnificent monthly turnover in August.

The company’s Pharmaceutical segment distributes branded and generic drugs. The Medical segment makes Cardinal Health-branded medical, surgical and laboratory products. After five straight quarters of declining earnings, adjusted profit in its latest reported quarter jumped 36%, with revenue up 11% to $47.1 billion.

It is a member of the prestigious IBD Leaderboard list of top stocks.

What To Do As Bear Market Continues To Roar

Texas Roadhouse Stock

Texas Roadhouse trading near its buy zone after previously clearing a flat-base entry point of 95.52. It comes after it previously broke past an early trendline entry.

The relative strength line for TXRH is remarkable, making new highs for months. This is especially impressive as retail and consumer-spending sector leaders are few and far between.

Overall powerful performance is reflected in an IBD Composite Rating of 94. The stock has seen its price pop by almost 6% over the past four weeks alone.

Texas Roadhouse’s first shop opened in Indiana, very close to its current headquarters of Louisville. It follows a simple strategy: Provide a fun, family friendly dining experience with great value.

The pitch has one plenty of institutional support, with 63% of its stock currently being held by funds.

The casual dining specialist has over 680 locations in 49 states and 10 foreign countries. It also operates under the Bubba’s 33 and Jaggers names.

The firm currently boasts average EPS growth of 63% over the past three quarters. Texas Roadhouse has also posted average EPS growth of 27% over the last three years.

In Q2, the company generated earnings of $1.07 per share, a 1% slowdown compared to the prior-year quarter. Analysts forecast a rebound to 17% growth for Q3 and 12% for the full year.

Texas Roadhouse generated 14% sales growth in Q2, slightly above its 13% average annual growth over the last three years. The company earns an “A” SMR Rating, which track sales growth, profit margins and return on equity.

The purveyor of hearty fare like Texas Size Combos and Fall-Off-The-Bone Ribs is scheduled to report Q3 earnings after the close on Oct. 27.

Earlier this month Wedbush hiked its price target on Texas Roadhouse stock to 98 from 95 while maintaining an outperform rating. The firm noted “consistent market share gains’ for the dining chain.

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