In the early stages of an uptrend, it’s hard to tell just how far a stock will rally. Sometimes these trends are short-lived and “only” give us a 10% return. Other times though, these trends are good for several years and return 100% or more.
Telling the difference in the beginning is tough and too many investors take a pass on something because it’s up 10% or 20% in a few months. While there’s no such thing as a risk-free bet, they’re leaving a ton of reward on the table by avoiding the name simply because of its recent rally. It reminded me of a line from a great writer, Richard Saintvilus:
“One lesson, among many others, I’ve learned on Wall Street is that it’s never too late to make the right call. And if ever that proverbial train “leaves the station,” there’s nothing wrong to admit you were wrong and chase that train to get back on board — even if the ticket costs more to ride.”
A stock rallying from $105 to $125 in a few months is a lot and may make many feel they’ve missed the train. But what if we ignored a good fundamental situation because “it had rallied too much.” Ultimately nine months later that stock is sitting another $50 per share higher and we ignored it. We sat out a $50 per share gain because of its $20 rally? That doesn’t make any sense.
With that in mind, let’s take a look at 8 solid stocks that are still in an uptrend and may still have farther to go.
Uptrend Stocks to Buy: Netflix
Netflix, Inc. (NASDAQ:NFLX) has been on a mission, both in reality and in the stock market. The company’s goal is to become the leader in global streaming. With 125 million customers, it’s well on its way to fulfilling that leadership goal. Heck, its market cap is just $7 billion short of Walt Disney Co (NYSE:DIS).
That puts things in perspective a bit.
But NFLX stock has been even more impressive than the company. It’s up 132% over the past 12 months and 73% since the start of 2018. That’s paved a solid — if also explosive — uptrend for investors.
As you can see, Netflix stock has been a beast. Notice that when it started 2018, shares weren’t over $200 yet! Now we’re already over $300. The move has been intense, but so long as the trends stay in place it’s hard to bet against NFLX.
Over its previous highs and above $330, Netflix stock is basing nicely. Momentum is strong and the stock is not yet overbought (blue peaks on the chart). Should nearby support fail, investors would be lucky to gobble up the stock near $300. There should be support near this level, along with the 50-day moving average and a rising uptrend line of support.
Given that the company just beat earnings, revenue and subscriber estimates, as well as provided subscriber guidance that topped analyst estimates
Uptrend Stocks to Buy: Nvidia
Nvidia Corporation (NASDAQ:NVDA) has been one of the market’s best performers. If you bought this name at the start of 2016 and forgot how to hit the sell button, you’d be sitting on a 600% gain in Nvidia. While the move has been extraordinary, we could be setting up for even more gains.
Looking at the charts, it’s pretty obvious that Nvidia has been struggling to eclipse the $250 mark. On three separate occasions this year, shares have rallied to this point only to fail and stumble lower.
Thursday’s 3% selloff could setup NVDA stock to retest the 100-day moving average and uptrend support that’s been in place for almost a year.
Just like January 2017 through May 2017, it’s good to see Nvidia digest some of its massive move over the past 12 months. If there are worries about waning demand due to cryptocurrency headwinds, then Nvidia stock could see a further decline — perhaps down to that $200 level we’re wishing for.
While this is one of the strongest uptrend stocks we’ve seen, remember it has massive gains over the past few years. Eventually a big pullback wouldn’t be a surprise. If $200 comes, it would be a 20% decline for the highs. I’d love to buy into its secular upside on a short-term selloff.
Uptrend Stocks to Buy: Boeing
Boeing Co (NYSE:BA) went from a frustratingly stubborn stock to one that couldn’t be stopped. Consider that BA stock was flat from January 2014 through October 2016, almost a three-year lull. However, shares then exploded 90% in 2017.
So what now?
It obviously wouldn’t be surprising to see Boeing stock settle down and consolidate a bit. Even bouncing between $300 and $360 for a few quarters would represent a relatively healthy consolidation period.
I like BA for its intense earnings growth, commitment to capital return and huge free-cash flow. It’s not the cheapest stock in the world anymore, but valuation and consolidation aren’t enough of a reason to sell the stock.
Shares still look great in the short-term, as our chart shows. Poking through resistance with plenty of support nearby, BA stock could retest its old highs if these patterns hold steady. It’s got bullish momentum and isn’t overbought yet either (blue circles on the chart).
Uptrend Stocks to Buy: Salesforce
salesforce.com, inc. (NASDAQ:CRM) has tripled since mid-2013, but its gains over the past 16 months have been truly impressive. Shares have quietly rallied 81% over that period, forming quite the uptrend in CRM.
Despite CRM still churning out incredible growth, it seems to be much less discussed than it was a few years ago. That’s not stopping the analysts, though. They expect annual revenue of about 20% for the next four years. On the earnings front, estimates call for almost 60% growth this year and another 26% growth next year.
While CRM is pretty expensive on an earnings basis, its sales-based valuation is actually pretty reasonable versus its peers. CRM has better growth than most of its large cap competition and far superior financials and cash flow compared to its smaller competition. It’s in a real sweet spot right now. Lastly, the company has a very long runway for growth — as seen by the long-term revenue predictions — giving investors confidence to buy the stock today.
Investors could easily draw an uptrend line on CRM’s chart to highlight the stock’s robust rally. But just look at the 100-day moving average instead. All three major moving averages are trending higher, but each time Salesforce pulls back to the 100-day, CRM has an intense bounce.
Uptrend Stocks to Buy: Roper
Roper Technologies Inc (NYSE:ROP) has been in a very steady uptrend over the last year and a half.
In fact, Roper was and still is one of my top Future Blue Chip stocks. Known for robust revenue and earnings growth today, management has demonstrated a tangible commitment to returning capital to shareholders. The goal here is simple: Allow the company’s robust growth to drive shares higher over the long-term and cement its position in our portfolio with a low cost basis, while enjoying management’s continued commitment to raising the dividend once the business is more matured.
Well, ROP sure is delivering on the first part of our strategy: allowing strong growth to drive shares higher. Since the start of 2017, Roper stock is up more than 50% and is up more than 35% over the past year.
I’m definitely not ready to bet against Roper anytime soon. However, some may start to grow concerned over its valuation and growth profile. Analysts expect sales growth of just 6.1% this year and 7% next year. That’s good, but not necessarily great. While 17.5% earnings growth this year is very solid, estimates of just 8.5% next year is sort of lackluster.
It may make some wonder if ROP stock is worth 25 times this year’s earnings and 23 times next year’s estimates. On the chart though, Roper still looks great.
There’s pretty clear resistance between $285 and $290, while uptrend support currently sits around $270. The 100-day is support as well. If these support levels give way though, the 200-day moving average would be my downside target. If ROP stock breaks over resistance, consider buying the breakout.
Uptrend Stocks to Buy: Visa and MasterCard
Let’s do a double for this one: Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA). Both companies are huge beneficiaries of the same trend, as global consumers continue moving to credit and debit from cash and check. Further, growing e-commerce sales bode well for V and MA too, for obvious reasons.
The credit card business is attractive for many reasons, as V and MA serve as simple “toll booth” businesses. They don’t lend consumers money and they don’t take on big risks. Instead, when a consumer purchases goods or services from a merchant and pays via credit card, the merchant pays a fee that goes to V and MA.
While the pair of stocks may look expensive on a sales basis at first glance, the earnings-based valuation isn’t all that bad. Especially considering their double-digit earnings and revenue growth.
Throw in the fact that Visa has profit margins of almost 40% while MA has margins of 32% and we can see that these two are earning money hand over fist.
Both stocks tend to trade with a high correlation.
As V and MA both bump up against resistance, they look like they’ll soon push through to new highs, short of another market-wide selloff.
Uptrend Stocks to Buy: Raytheon
Like Roper, Raytheon Company (NYSE:RTN) is another under-the-radar company. However, its stock sure has become something to talk about, with shares up about 50% over the past 12 months.
While the rest of the market has been floundering, RTN stock is already up more than 21%. That’s what happens when a company makes anti-missile defense systems and the U.S. military has an annual budget of roughly $700 billion.
While the U.S. government utilizes other anti-missile defense systems — Lockheed Martin Corporation (NYSE:LMT) also makes one — the desire for countries to boost their defensive capabilities continues to increase. That’s no surprise given the tension on the Korean Peninsula and continuing conflicts in the Middle East.
Despite expectations calling for revenue growth of about 5% this year and next year, earnings are set to explode — no pun intended. Analysts are looking for 27% growth this year and more than 15% growth in 2019. With earnings growth outpacing revenue growth, look for margins to expand as well. If the government keeps spending like Trump has so far, expect more lucrative contracts in the future, too.
After flagging the stock as a potential breakout candidate earlier this month, the recent 52-week highs come as little surprise. Going forward, look for RTN to make even more highs so long as its uptrend support holds steady (as shown on the chart). Keep in mind, the average analyst price target sits at $240.
