Successful investing requires identifying the best stocks to buy right now as either undervalued stocks or those oversold companies that may be on the verge of a strong rebound.
Just because the overall market has seen only modest gains in the first quarter, that doesn't mean that there aren't companies and industries with enormous growth potential. Many of the current stock picks have been both responsive to global economic volatility and have that long-term potential that many investors desire.
Here are some of the Money Morning recent picks of best stocks to buy now.
Best Stocks to Buy Right Now: High-Tech and Defense
Raytheon Co. (NYSE: RTN) is an American technology company that specializes in government and defense markets. The company develops products in the areas of intelligence, mission support, communications, control, and security. When government unrest and threats of terrorism are high, companies that specialize in defeating these threats will continue to prosper. Raytheon is a $32.6 billion business that does precisely that, showing positive earnings along the way. RTN ended 2015 up more than 14% for the year, and the company has raised payouts seven years in a row, with a 141% growth rate. The company has 15 analysts rating it as a "Buy" and is currently trading at $125.76.
TASER International Inc. (Nasdaq: TASR) is an American company that develops, produces, and markets conducted electrical weapons (CEWs) for use by military, law enforcement, and private individuals for defensive purposes. The company operates two divisions, TASER weapons and Axon, which is a line of wearables such as police body cameras. Money Morning Technical Trading Specialist D.R. Barton named TASR as one of the best stocks to buy today due to its new wearable video system, which he calls "an off-the-shelf solution to one of the most pressing, controversial social problems of recent history." These cameras are not only more versatile than GoPro's, but the company already has a loyal customer base and offers the benefit of a subscription-based cloud storage service for videos. In the fourth quarter of 2015 alone, the Axon division's sales rose 47% to $9.4 million, and the company reports over $159 million in future contracts. TASR stock is currently trading at $17.66, and Barton estimates that it could outperform its previous high of $35.
Best Stocks to Buy Right Now - Gold Companies
AngloGold Ashanti Ltd. (NYSE ADR: AU) is a South African mining and exploration company that operates 17 mines in 10 different countries. Its major operations are in South Africa, the Americas, Australia, and Continental Africa. AU is the world's largest gold producer at 7 million ounces per year, and four analysts currently rate the company a "Buy." The company has exhibited a steady increase in both net income as well as earnings per share. AU is currently trading at $15.48 and is up 117.9% year to date.
Barrick Gold Corp. USA (NYSE: ABX) is a Canadian gold mining company that specializes in the production and sale of both gold and copper. The company operates 14 gold mines, principally located in the United States, Canada, Australia, Peru, Argentina, Papua New Guinea, and the Dominican Republic. Barrick has become a top pick among gold investors for several reasons. Performance this year has been outstanding, with an 84% Q1 gain and a 149% gain year to date. Its $3 billion debt reduction in the past year, with another $2 billion planned for 2016, makes this "best stock to buy now" an attractive choice. On May 4, ABX was trading for $18.38.
Newmont Mining Corp. (NYSE: NEM) is a U.S.-based global mining company that specializes in the exploration and production of gold and copper. The company's primary business is gold production, and it has operations in the United States, Indonesia, Australia, Ghana, Peru, and Suriname. The company has recently divested some non-essential assets, placing it in a stronger business and financial position. An Indonesian consortium may be poised to offer $2 billion for Newmont's in-country assets. Three brokerage firms currently rate NEM as a "Strong Buy" and another rates it as a "Buy." At $33.83, NEM shares are up 88.05% year to date.
Best Stocks to Buy Right Now - Other Industries
United Parcel Service Inc. (NYSE: UPS) is a global package delivery company that offers guaranteed domestic and international shipping services. Founded in 1907, UPS is now a company with $58 billion in revenue that serves more than 220 countries and employs 444,000 workers. While there has been chatter that Amazon is gearing up to enter the logistics business, their business represents merely 6% of UPS' domestic volume. In contrast, this thriving company is expected to grow its online retail shipments 21% annually over the next five years and has shown an annual return on invested capital (ROIC) of 32%. UPS has continued to pay back its investors with $58 billion in dividends and buybacks in the past 15 years. As Money Morning reported recently, "the consensus earnings estimate for 2016 is $5.78. At the current price/earnings ratio of about 20, that's a price of $115.60." UPS is currently trading at $104.39, leaving you plenty of room to jump in.
American Water Works Inc. (NYSE: AWK) is a company that provides both water and wastewater services throughout the United States and Canada. In uncertain economic times, it often pays to look to a sure thing, and one that we can generally rely on is population growth. AWK is both a necessary service and a well-run company. It has had positive growth in earnings per share, net income, and overall revenue. The company maintains good cash flow from operations and has plans to invest $6.4 billion in new operations between now and 2020. AWK ended last year up 10% but its performance so far this year has been much better. At $73.93, AWK shares are up 23.73% year to date.
Identifying and investing in individual and speculative stocks is an excellent way to realize gains in the coming year. However, investing is still risky, and it's always recommended that you keep a reasonable level of diversification in your overall portfolio.