After the stock market rout, picking stocks is more challenging than before. Investors are cautious as major indexes remain stuck below their 50-day moving averages — as do many market leaders. But Monday's rebound shows that stocks could recover quickly and building a watchlist of stocks to buy amid the early and tenuous signs of a rebound can pay off richly.
One way of finding growth stocks to watch is to look for those with rising profit estimates. IBD's Stock Screener includes the Rising Profit Estimates screen to help with that purpose. But be sure to buy only when stocks top proper entry points while remaining mindful that uncertain market conditions make any new stock purchase extra risky.
Meta Platforms is already back at the 50-day line after a two-day sell-off that took the stock 3.5% below the line.
Rising profit estimates for the social media giant are a point in favor of the stock and follows strong growth in its advertising revenue during the second quarter. For the full year, analysts polled by FactSet estimate a 37% gain in profit to $21.26 per share and $24.11 in per share in 2025 — a 13% increase.
Netflix, Nvidia Stock In Downtrend, But Rising Estimates
Netflix is in a downtrend after shares fell in a bearish outside day after its second-quarter report on July 18. That signaled an increase in volatility and change in trend. Sure enough, shares gave back a 9% gain from an earlier buy point at 639 as they fell below the 50-day moving average in heavy volume and kept drifting lower.
But shares are reversing higher on Tuesday. The nascent recovery gets support from analysts who see profits rising for the content streaming company. For 2024, that is a 59% growth or $19.09 per share while in 2025, Netflix's profits are seen growing 20% to $22.95 per share.
Nvidia rebounded 5% Tuesday. While the stock has much work to do before reclaiming the 50-day line, analysts are upbeat on the AI chip leader's profits for 2024 and 2025.
Nvidia delivered blockbuster results in its first quarter. For the fiscal year ending in January, analysts see profits rising 108% to $2.71 per share, while for 2025 they expect profit to grow 38% to $3.75 per share.
Regeneron's Healthy Chart
Regeneron has one of the best looking charts on the rising estimates screen. The stock has found support at the 10-week moving average that could be seen as a point of entry. IBD MarketSurge's chart analysis tools show the stock is extended from an earlier buy point of 997.87.
After two years of declining profits, analysts expect EPS to rise 3% in 2024 to $45.03. In 2025, profit estimates indicate an 8% increase to $48.70 per share.
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