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Here's what we learned in the past week on our regular hunt for the best stocks to buy now: investors have more access to biotech's best investments, earnings reports are clearly separating winners from losers, and cybersecurity is looking even more profitable than before.
First, let's start with earnings…
Indeed, earnings reports were big market drivers this week, with tech leading the way.
Over the last five days, we saw earnings from 157 companies, including eight Dow components and a slew of high profile firms including Apple Inc. (Nasdaq: AAPL), Facebook Inc. (Nasdaq: FB) and Amazon.com Inc. (Nasdaq: AMZN).
To date, more than 45% of S&P 500 companies have reported results for this quarter. Some 68% of firms have beaten earnings expectations and 56% have topped revenue forecasts, according to Thomson Reuters.
If all companies still on tap to report earnings simply come in line with projections, earnings will be up 4.1% from the same quarter a year ago. Moreover, since companies have delivered strong forward guidance, growth should continue into 2014.
That sets the stage for some hefty year-over-year gains for the Dow, the S&P and the Nasdaq.
All three indexes are up nearly 18% year-to-date, presenting some huge profit plays if you know the right stocks to buy.
This Week's Best Stocks to Buy
Here at Money Morning, we aim to keep you informed on the best stocks to buy – and sell – as market news unfolds. Based on what happened this week, check out these developing investment opportunities:
- Monday we told you why cybersecurity was one of the best investments to make now (and gave you our fave picks). Sure enough, on Tuesday, there was a big deal in the sector when Cisco Inc. (Nasdaq: CSCO) bought Sourcefire Inc. (Nasdaq: FIRE) for $76 a share, a near 29% premium, in a $2.7 billion deal. FIRE investors saw the stock jump 30%. M&A activity in the industry is just heating up with plenty more deals likely in this winning space. You can find the full analysis on cybersecurity's investment opportunities here.
- Growth at a reasonable price is a good investment strategy. Yet growth at a reasonable price where earnings have the potential to explode is an even better plan, and we found two stocks to buy that fit that strategy: