These Are The 5 Best Stocks To Buy And Watch Now For March

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? MercadoLibre (MELI), Meta Platforms (META), HubSpot (HUBS), PagerDuty (PD) and Palo Alto Networks (PANW) are prime candidates.

X

With inflation worries high, and the Federal Reserve tightening rates aggressively, market action was challenging in 2022, with more difficulties expected in 2023. The Russian invasion of Ukraine continues to cast a shadow over 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. The market overall has been choppy since then, with bear market rallies often being undercut by painful drawdowns. While the Nasdaq looks healthy, the S&P 500 has fallen under the 50-day moving average amid challenging action sparked by negative action among bank stocks.

The stock market is currently in the grip of a correction. Now is a time to avoid buying stocks altogether. You should also be entirely off margin.

It is 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 averages.

Now is a time to prepare for the next stock market uptrend by creating a robust watchlist. Focus on fundamentally strong stocks coming out of sound chart patterns, such as those in the IBD 50. These names will tend to have rising relative strength lines. The stocks below are good candidates.

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

• MercadoLibre
• Meta Platforms
• HubSpot
• PagerDuty
• Palo Alto Networks

Now let’s look at MercadoLibre stock, Meta stock, HubSpot stock, PagerDuty stock and Palo Alto Networks stock in more detail. An important consideration is that these stocks all boast impressive relative strength.

MercadoLibre Stock

MercadoLibre is trading below a flat base buy point 1,250.58. It found support at the 10-week moving average amid recent market turmoil, an encouraging sign. The flat base formed just over a longer consolidation.

The relative strength line is also looking strong. This means it has outperformed the S&P 500 in recent weeks.

MELI has an Accumulation/Distribution Rating of B+, which reflects strong buying among funds. It also holds 1.2 up/down volume ratio.

MercadoLibre is the largest e-commerce company in Latin America, but it faces competition from Amazon (AMZN). Strong overall performance has netted it an IBD Composite Rating of 99. 

The company recently reported Q4 profit of $3.20 a share, reversing a year-ago loss. Revenue increased 41% to $3 billion.

Full-year 2022 EPS skyrocketed 473%. Analysts see 2023 EPS swelling 64% in 2023.

Based in Buenos Aires, Argentina, MercadoLibre is the largest provider of e-commerce services in Central and South America. It has a big leg up on industry behemoth Amazon in its own backyard.

The company operates online commerce and payments in Argentina, Brazil, Mexico, Colombia and other countries in Latin America.

In addition to providing an e-commerce marketplace for buyers and sellers, with 127 million active users, MercadoLibre hosts platforms where users can create online stores.

Its financial business, called Mercado Pago, allows users to make contactless payments, pay utility bills, make peer-to-peer transactions and pay for transportation tickets, among other things. It has more than 40 million users.

MELI stock has surged into first place in IBD’s competitive Retail-Internet industry group. Other high fliers include China e-commerce giant Pinduoduo (PDD) and Etsy (ETSY).

Meta Stock

Meta stock is trading in a buy zone after clearing a flat base entry point of 197.26.

The flat base formed as the stock held support at the 21-day exponential moving average.

The social network is a turnaround story amid declining earnings and revenue. This year, annual profit is expected to rise 12%, with growth accelerating in 2024, up 21%.

Lackluster earnings are reflected in an EPS Rating of 48 out of 99. Despite this, growing bullish sentiment is reflected in the fact it is in the top 4% of stocks in terms of price performance over the past 12 months.

Meta lost roughly $10 billion in ad revenue last year due to Apple (AAPL) amending privacy policies for the iPhone. This made it more difficult to accurately target users with ads.

But Meta has made technology improvements with its new ad strategy.

Meta, like all social media companies, is struggling due to a sharp reduction in advertising. In addition, companies are squirming over macroeconomic concerns, fears of a recession and higher interest rates. This is happening as Facebook is spending billions on a risky bet to build the “metaverse,” a virtual reality world that has yet to take hold.

In November, Meta cut 11,000 employees, or 13% of its workforce. Meta stock is up around 20% since then.

In mid-March, Meta announced plans to cut another 10,000 jobs, which help spur the stock’s latest advance.

Chief Executive Mark Zuckerberg, in a statement with the earnings report said, “Our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”

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

HubSpot Stock

HubSpot has fought back after falling below a handle entry in a bottoming base. It is back above the buy point of 399.65. It has also formed a new flat base, which offers a higher potential entry of 418.49. A move above the March 23 high of 405.45 offers an early entry.

Encouragingly, the stock has been getting support at its 21-day exponential moving average and recently found support at the 50-day/10-week line. IBD research has found that big stock market winners tend to find support at the 21-day after a breakout for at least several weeks.

The Cambridge, Mass., firm specializes in helping businesses automate marketing and sales operations.

Its cloud-based platform also assists clients in social media, search engine optimization and website content management.

Earnings and sales have grown sharply over most of the past eight quarters. December-quarter profit soared 91% on a 27% revenue jump to $469.7 million, likely a sales record for a single quarter.

At least seven members of the IBD Mutual Fund Index own shares. Funds own 66% of the CRM shares, with 1,428 funds holding shares in December from 1,413 funds in September.

HubSpot announced in late January it would lay off about 500 employees, or 7% of the workforce, and consolidate leases as part of a cost-cutting plan.

“We grew head count faster than revenue in a number of teams. We were optimistic about our head count growth and underestimated the impact of the slowdown in 2022,” said CEO Yamini Rangan.

Some analysts view the software company as among AI stocks to watch. HubSpot could get a boost from “generative AI” technologies such as ChatGPT.

Generative AI technology creates text, images, video and computer programming code. The new form of AI technology already is finding applications in marketing, advertising, drug development, legal contracts, video gaming, customer support and digital art.

HubSpot in February announced trials of “content assistant” and ChatSpot.ai.

“A meaningful number of marketing and customer service use cases can be solved today with (generative AI),” Wolfe Research analyst Alex Zukin said in a recent research note.

PagerDuty Stock

PagerDuty is setting up a potential breakout as it eyes a cup-with-handle entry of 33.87 . This is a first-stage base. The stock has a penchant for big whipsaws, both on a daily and weekly basis.

It managed to make a muscular 25% gain from 26 to 33 in just a couple weeks, so some sideways action could be beneficial.  Volume has been expanding more on the upside, a positive.

The stock has a top-notch IBD Composite Rating of 98. Stock market performance is currently its strongest suit. It is in the top 9% of stocks in terms of price performance over the past 12 months.

The company helps clients keep their digital operations running smoothly. PagerDuty’s cloud-based platform provides “incident response” support for applications being deployed by information technology departments.

“The company’s name has become synonymous with IT alerting,” PD stock analyst Rob Oliver of Baird said in a recent note to clients. “The company’s origin story — founded by Amazon IT staff seeking ways to make sense of the exponential growth in alerts amid tremendous growth — is highly compelling and has helped establish the company’s strong reputation with DevOps (development and operations) teams.”

At a growing number of companies, digital transformation means speeding up internal software development and deploying new applications quickly. The process includes monitoring how apps perform. It’s called “DevOps.”

In its Q4 report, PagerDuty noted 50 clients that now have $1 million in annualized recurring revenue (ARR) and 752 customers with ARR of $100,000 or greater, up 26% vs. a year earlier.

It also finished the year with 15,244 total customers, up 2.5% year over year. San Francisco-based PagerDuty lost a cumulative $1.62 a share from fiscal 2018 through fiscal 2022. So a FY 2023 profit of 4 cents a share is a milestone.

Wall Street sees earnings soaring to 46 cents a share in FY 2024 and up 39% to 64 cents in FY 2025.

Markets Still Must Do This; Bank Fears Ease

Palo Alto Networks Stock

Palo Alto Networks trading around a 192.94 buy point. It has been performing well since gapped up on Feb. 22 on earnings. The buy point also roughly corresponds to resistance from last August.

The stock made a big move off the January lows, so some sideways action from here as it digests gains would not be surprising.

Its relative strength line has just hit fresh heights, reflecting outperformance vs. the S&P 500 of late. PANW stock is up nearly 39% so far in 2023.

The cybersecurity giant announced very good results for the January-ended quarter that saw earnings hit $1.05 a share, up 81% vs. a year earlier, on a 26% jump in revenue to $1.7 billion.

CEO Nikesh Arora said in a news release that investments made over the last several years have “enabled us to raise our billings and NGS ARR guidance.”

CFO Dipak Golechha noted the company is raising cash flow margin and operating profitability targets.

For the current quarter ending in April, Palo Alto projected earnings of 92 cents a share on revenue in a range of $1.69 billion to $1.72 billion. Analysts had estimated profit of 79 cents a share on revenue of $1.74 billion.

Palo Alto also raised its revenue outlook for next-generation cloud-based software products to a range of $2.75 billion to $2.8 billion. That topped its earlier outlook of $2.65 billion to $2.7 billion.

Meanwhile, the company has spent over $3.4 billion making 10 acquisitions over the past three years. With roots in the “firewall” network security market, Palo Alto aims to build a broad cloud-based security platform. Firewall appliances protect computer networks by blocking online intrusions and monitoring web-based apps.

Its strong performance has netted PANW stock a spot on the prestigious IBD Leaderboard list of top stocks.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.

YOU MIGHT ALSO LIKE:

Stock Market Forecast For Next Six Months Holds Big Risks For Dow Jones — But Hope Too

MarketSmith: Research, Charts, Data And Coaching All In One Place

These Are The 5 Best Stocks To Buy And Watch Now

This Is The Ultimate Warren Buffett Stock, But Should You Buy It?

This Is The Ultimate Donald Trump Stock: Is DWAC A Buy?