It's easy to get overwhelmed when looking for the best stocks to buy and watch. While it's always a good idea to focus on the strongest price performers in an industry group using Investor's Business Daily's Relative Strength Rating, identifying the fundamental standouts using IBD's Earnings Per Share Rating also makes sense.
Both ratings, along with a stock's distance from its 52-week high, carry extra weight in IBD's Composite Rating. Other stock ratings like the Accumulation/Distribution Rating, SMR Rating and Industry Group Relative Strength Rating are also factored into the Composite Rating. Ranked on a scale of 1-99 with 99 being the best, the Composite Rating combines all five ratings to measure the most important fundamental and technical factors that define winning stocks.
You should generally focus your attention on stocks with Composite Ratings of 90 or higher. The biggest stock market leaders often have Composite Ratings of 95 or higher. But don't automatically dismiss a stock just because it has a Composite Rating below 90.
Recent initial public offering CoreWeave recently had a Composite Rating of 78. In this case, the rating is weighed down because CoreWeave isn't profitable yet. But CoreWeave has the look of a stock market leader after a hugely successful IPO. It priced below expectations at 40, but the stock broke out of an IPO base in mid-May and hit a high of 187 in June. Now it looks like it's ready to form a new base.
Even with a lackluster Composite Rating, CoreWeave still merits attention due to several quarters in a row of triple-digit revenue growth. CoreWeave operates more than 30 data centers and basically rents out cloud access for AI development and training.
Best Stocks To Buy And Watch: Circle Internet
Stablecoin issuer Circle Internet, another top-performing new issue, recently had a Composite Rating of 82. In this case, the rating is weighed down by some earnings declines last year. But first-quarter results showed earnings up 32% to 29 cents a share, with revenue up 58% to $578.6 million.
The IBD Stock Checkup tool at Investors.com shows the top five stocks in an industry group, sorted by Composite Rating. It's a quick way to gauge the breadth of leadership in a particular group.
The Building-Heavy Construction industry group is filled with stocks with high Composite Ratings. Primoris Services — which provides specialty construction and infrastructure services to firms in the energy, utility and renewable energy industries — is a top-rated stock in the group. Primoris was recently just past the 5% buy zone after a breakout from a cup-with-handle base with a 78.36 buy point.
Also in the group, Argan recently cleared a deep cup base with conviction. It's now pulling back and testing support at its 10-week line. A bounce off the key support level with conviction would put the stock in an alternate buy zone.
Follow Ken Shreve on X @IBD_KShreve for more stock market analysis and insight.
