Some investors seem to have a magic touch, and that is certainly the case with legendary money manager George Soros. His Quantum Fund provided outsized returns for decades. So, what are the best George Soros stocks to buy now or put on a watchlist? At the moment, Denbury, D.R. Horton and TransDigm are looking bullish.
Why George Soros Stocks?
George Soros is famous for many reasons, with the billionaire's success in investing a primary one.
His Quantum Fund provided investors with compound returns of about 20% per year for decades. He also gained notoriety as "The Man Who Broke the Bank of England" after his short sale of $10 billion worth of pounds sterling helped force the UK government to withdraw from the European Exchange Rate Mechanism. Soros netted a profit of $1 billion during the 1992 Black Wednesday UK currency crisis in the process.
In 2011, the Quantum Fund returned all outside money to investors and became a family investment group.
George Soros remains as chairman of Soros Fund Management. The stock picks below come from the firm's portfolio of holdings.
Best George Soros Stocks To Buy: The Crucial Ingredients
There are thousands of stocks trading on the NYSE and Nasdaq. But to generate big gains you have to find the very best ... those offering a mix of earnings and stock market performance.
Investor's Business Daily 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.
The Market Is Key When Buying Soros Stocks
A key part of the IBD philosophy is to keep a close eye on the current direction of the market. Most stocks, even the very best, follow the market. Invest when the stock market is in a confirmed uptrend and move to cash when the stock market goes into a correction.
The stock market rally that kicked off in January 2022 soon fell on its face. The market overall was choppy last year, with bear market rallies often being undercut by painful drawdowns.
The stock market is now back in a confirmed uptrend. With earnings season kicking off, investors should raise exposure at a measured pace. A confirmed uptrend is when investors should make most stock purchases. It's also a good time to add to existing holdings at follow-on opportunities, such as support at the 50-day moving average or at the 10-week moving average.
It remains 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.
A good way to stay engaged is to build up one's watchlist of potentially actionable stocks. 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.
Looking For The Next Big Stock Market Winners? Start With These 3 Steps
Denbury Stock
DEN stock is forming a new consolidation with an ideal entry point of 104.15. This is a first-stage pattern, which means it is more likely to net rich gains.
Aggressive investors can also use a bounce off the 50-day moving average as an early entry point, though it may be more prudent to wait for price action to clear the conventional buy point.
The relative strength line is off highs, though it has firmed up following a recent decline. This compares a stock's performance to that of the benchmark S&P 500 index. An upward move could fuel a breakout.
Denbury stock has been a strong performer over the past year. In fact, it is in the top 14% of stocks in terms of price performance over the past 12 months.
It is also very strong from a fundamental standpoint, holding a perfect Earnings-Per-Share Rating of 99. Wall Street expects full-year EPS to pop by 177% in fiscal 2022, before slipping to 11% growth in 2023,
Most of Denbury's oil and gas production is concentrated on the Gulf Coast and the Rocky Mountains.
It reported a negative production impact of about 1,100 to 1,300 barrels of oil equivalent per day in Q4 2022, due to downtime caused by winter storms in the Rocky Mountain and Gulf Coast regions in December. Most production has now been restored.
The company has bounced back from a Chapter 11 bankruptcy filing in September 2020, and is one of the top-ranked stocks in IBD's Oil & Gas-U.S. Exploration and Production group.
D.R. Horton Stock
D.R. Horton is trading near the top of a buy zone from a cup-with-handle entry of 92.55, MarketSmith analysis shows. Investors should watch in case it pulls back from its current level.
This is also a first stage pattern. It had been consolidating for the 55 weeks and remains off its all-time highs.
The relative strength line looks very strong, and has generally made good progress since late August.
All-around performance is very strong, with the stock holding an IBD Composite Rating of 93.
The homebuilder recently reported earnings, topping views on both the top and bottom lines. EPS of $2.76 was above analyst expectations for $2.25. Sales of $7.3 billion was better than the firm had forecast and also above Wall Street expectations for $6.4 billion.
While new orders fell short, some positive metrics could signal a constructive spring selling season.
Investors seeking an alternative to stock-specific risk could also consider the iShares U.S. Home Construction ETF. ITB is a member of the prestigious IBD Leaderboard list of top equities.
DHI stock is slightly extended but ITB is currently in a buy zone above a 65.10 entry.
It has plenty of exposure to the homebuilders, including ancillary names like Home Depot, Lowe's and Sherwin-Williams.
D.R. Horton is the fund's biggest holding, at around 16%.
TransDigm Stock
TDG stock is also one of the best George Soros stocks to buy or watch now. It is trading in a buy zone after clearing a double-bottom base buy point of 680.10.
It is currently trading above both its 50-day and its 200-day moving averages. The relative strength line has also been gathering momentum of late.
TransDigm stock is in the top 11% of stocks in terms of price performance over the last 12 months.
Earnings performance is solid too, with TDG stock holding an EPS Rating of 80 out of 99. Earnings have grown by an average of 42% over the past three quarters.
The aerospace firm makes and sells replacement parts for ignition systems, pumps, flight controls among other things.
It makes many proprietary products for defense applications, generating strong pricing power.
One reason to be cautious is the firm could be set to post earnings soon. In 2022 it posted fiscal Q1 earnings on Feb. 8.
An approach highlighted by Investor's Business Daily is to use options as a strategy to reduce risk around earnings. It's a way to capitalize on the upside potential of a stock's move around earnings, while reducing the downside risk.
For fiscal 2022, TransDigm's adjusted earnings spiked 41% to $17.14 per share as revenue climbed 13% to $5.43 billion.
The company said it expects 2023 full-year adjusted earnings to range between $20.68 and $22.08 per share, on $5.99 billion to $6.07 billion in revenue. The company forecasts commercial aftermarket revenues to grow in the mid-teens percentage range while defense revenue grows in the mid-single digit range.
Wall Street consensus expects 2023 earnings of $21.18 per share on $6.07 billion in sales.
Overall, analysts are bullish on TransDigm stock, with RBC raising the price target to 750 last Friday and maintaining an outperform rating.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
