Best Tech Stocks To Buy And Watch: Why These 5 Top Stocks Should Be On Your Radar – Investor's Business Daily

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The best tech stocks to buy and watch aren’t hard to find, as long as you’re fishing in the right pond.

And what does fishing in the right pond mean? It means targeting top stocks showing resilience and holding near highs. The best tech stocks also boast strong fundamentals along with leading price performance in their industry groups. Many also show favorable fund ownership trends.

Top tech stocks now include Microsoft (MSFT), ServiceNow (NOW), PayPal (PYPL), Xilinx (XLNX) and CyberArk Software (CYBR). ServiceNow, Xilinx and CyberArk all currently share a spot in IBD Leaderboard, joining the list of top growth stocks earlier in the year.

Finding The Best Tech Stocks To Buy And Watch

Screening for the best tech stocks to buy and watch is as easy as looking at the MarketSmith Growth 250, a daily screen of high-quality stocks. Click on any column header to sort the screen as you wish, either by those closest to their highs, stocks with the highest Composite Rating, or stocks trading up in price with the heaviest volume.

The best tech stocks to buy and watch aren’t guaranteed to be huge stock market winners. But they do have qualities seen in past stock market winners before big price gains.

Keep in mind the best time to buy stocks is when the stock market is in a confirmed uptrend. It’s much harder to make money in stocks when a market uptrend is under pressure due to signs of institutional selling. It’s even harder when the stock market is in a correction.

Microsoft Stock

CEO Satya Nadella took over in 2014 and successfully moved the company’s focus from traditional software sales to a subscription-based recurring revenue model. Microsoft also has made big inroads in cloud-based services. It’s not easy for a megacap like Microsoft to pivot to new markets. But the Dow component is doing it successfully, with double-digit annual earnings growth expected in 2019 and 2020.

Microsoft continues to perform well after a breakout from a cup-with-handle base with a 108 buy point.

Composite Rating: 92 (scale of 1-99 with 99 being the best)

Latest-quarter EPS % change: +15%

Latest-quarter sales % change: +12%

Three-year annualized EPS growth rate: +18%

Annual return on equity: 35.5%

Annual pretax profit margin: 33%

ServiceNow Stock

The provider of cloud-based workflow automation software has been growing like gangbusters, even with a market capitalization of north of $40 billion. Annual earnings are expected to jump 24% in 2019 and 38% in 2020.

After a bullish gap Jan. 31 on strong earnings, ServiceNow could be poised for a test of the 10-week moving average. A bounce off the support level with conviction would put the stock in a secondary buy zone.

Composite Rating: 99 (scale of 1-99 with 99 being the best)

Latest-quarter EPS % change: +79%

Latest-quarter sales % change: +30%

Three-year annualized EPS growth rate: +82%

Annual return on equity: 55.5%

Annual pretax margin: 22.5%

PayPal Stock

Growth prospects are still bright for the leader in digital payments. The company recently took a $750 million stake in MercadoLibre (MELI), an Argentina-based e-commerce firm.

After a breakout over a 92.45 buy point, PayPal also is nearing a test of the 10-week line.

Composite Rating: 96 (scale of 1-99 with 99 being the best)

Latest-quarter EPS % change: +25%

Latest-quarter sales % change: +13%

Three-year annualized EPS growth rate: +24%

Annual return on equity: 18.6%

Annual pretax margin: 23%

Xilinx Stock

The fast-growing chip designer has seen its share of positive headlines recently. It’s in the right markets at the right time amid healthy sales of chips for data centers as well as the rollout of 5G networks. Its processors are also used in artificial-intelligence applications.

After soaring 18% during the week ended Jan. 25, Xilinx is also nearing a test of the 10-week line.

Composite Rating: 99 (scale of 1-99 with 99 being the best)

Latest-quarter EPS % change: +42%

Latest-quarter sales % change: +34%

Three-year annualized EPS growth rate: 13%

Annual return on equity: 25.3%

Annual pretax margin: 30.5%

CyberArk Stock

The strong performer in the security software group is thriving in a niche market. Hackers often aim to compromise networks by targeting management with privileged administrative access to company computer systems. CyberArk’s software monitors and manages these privileged accounts.

CyberArk is well past the 5% buy zone from the 81.98 entry point, but the stock continues to trade tightly near highs. Strength and support like this can often present an alternative entry.

Composite Rating: 99 (scale of 1-99 with 99 being the best)

Latest-quarter EPS % change: +117%

Latest-quarter sales % change: +36%

Three-year annualized EPS growth rate: 15%

Annual return on equity: 18.6%

Annual pretax margin: 27.7%

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