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Best Stocks to Buy: An Overview of the Best Stocks in 2019

Any one advisor asked to provide a list of top stocks to buy may provide a unique list of stocks with reasons why they feel they are the best options. Typically, some of the best stocks to buy are known as growth stocks. These stocks have shown that they are significantly performing better in terms of share price growth than the average for the market.

  • Guidelines for choosing stocks
  • Terminology used in stock trading
  • How to start researching stocks
  • A review of some of the best stocks to invest right now
Stocks Highlights

Guidelines for choosing stocks – what to consider

While the act of choosing stocks can be confusing for beginners, the following guidelines should help you to make better decisions:

  • Invest in stocks that you understand

Stocks that offer an easy-to-understand business model are preferred to those that are more complicated. If you possess industry knowledge about a specific company, it is also worth considering investing in.

  • Choose strong past performers
    While past performance is not a guarantee of future performance, long-term performance over several years is a compelling indicator.
  • Avoid investing in small-cap companies
    This is a guideline only as some small companies are definitely wise investments. The majority of your portfolio should be mid-cap and large-cap companies.
  • Choose stocks that pay dividends over those that don't
    While whether a stock pays dividends should not be the single deciding factor when making a purchase decision, it should be a consideration. However, some of the most highly recommended stocks, such as Google, do not pay dividends.
  • Choose companies with well-established brands or strong emerging brands
    In sectors where brand is important, such as retail, it is best to choose well-established brands that are highly admired or strong emerging brands on the verge of taking over the sector. In sectors where brand is not important, brand can be virtually ignored.

It’s also worth looking at buying on the low for established stocks. Ideally, established stocks should be purchased when the market experiences a significant pullback.

Top 3 Stock Broker Comparison

1
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74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

Terminology used in stock trading – familiarising yourself with commonly used terms

To make use of trading strategies, you need to understand the terms used within the industry. A review of the following terms will allow you to obtain a basic understanding of any stock:

  • P/E ratio: one of the most important terms to be aware of is the price-to-earnings (P/E) ratio. The P/E ratio is the best reflection of how expensive a stock is. The P/E is calculated by dividing the price per share by the earnings per share. Essentially, it illustrates how much you are paying for a dollar of profit. The historic average for the P/E ratio is 15.7, but it can range from 0 for a company without any profit to three figures for companies with high share prices and low profits.
  • Dividend yield: annual dividend payouts are often listed on financial news sites beside a percentage called a dividend yield. A dividend yield is calculated by dividing the annual dividend payout by the stock price. This represents the percentage of the value of the stock that investors receive in the form of dividends annually. Some of the best dividend-paying stocks pay yields of 4% or more.

Revenue growth reflects the total sales of a company over a given period. It is widely believed to be a straightforward method of predicting a company’s expected long-term growth. It is preferred over profit growth, which can be due to one-time events or cost-cutting.

Ratgeberbilder Artikel Boerse

How to start researching stocks – getting to know your investment

Before deciding to invest in any stock, make sure that you research the stock to gain a better understanding of how you can expect it to perform. While researching stocks that you are considering investing in may seem intimidating, the process is not as difficult as it may seem.

By educating yourself regarding stocks, you can research and choose your own stocks. Here are some things you should consider as you begin the process of researching stocks.

Just as you would perform research before buying a car or a house, you should avoid investing in a stock without becoming familiar with the business first. As owning a stock is the equivalent of owning a piece of a business, any business that is available on the stock market is required to issue public reports. These public reports serve as an excellent starting point for your research.

These public reports are often in the form of a company’s annual report. These annual reports are key to determining what is going on within a company. To make the best use of a company’s annual report, you will need to learn how to read an income statement and a balance sheet.

While there are guides available online, don’t dismiss the possibility of paying to meet with a financial advisor for some one-on-one guidance. A financial advisor can guide you through concepts such as diluted shares outstanding and depreciation, providing you with an in-depth understanding.

Using analysis to determine the best stocks to invest right now

There are two main methods used to analyse stocks. Your preference between the two will largely be determined by the amount of time you intend to hold a given stock, though neither should be ignored for any given investment.

Ratgeberbilder Artikel Steuern

Fundamental analysis:

More emphasis has been traditionally applied to fundamental analysis for longer-term investments. This method attempts to determine the value of a stock based on statistics such as industry position, growth rate, growth potential, income and revenues, alongside competitors and a company’s management structure. To compare two companies side by side that feature varying corporate structures and such things as differing share prices, a number of metrics have been developed, including dividend yield, P/E ratio and growth, and earnings per share.

Technical analysis:

Technical analysis is largely relied on by short-term traders. This method relies on the use of charts. Technical analysis is a good method for forecasting future pricing and volume trends. It can be used for both manual and automated systems. With manual systems, the trader is using the charts to determine buy and sell decisions, whereas with automated systems, the trader is creating rules for the system to follow in order to execute buy and sell decisions.

Combining these two methods can help traders to become more successful. Many advisors suggest that fundamental analysis should be used to select the potential stock to purchase, while technical analysis should be used to determine the best entry and exit points.

A review of the Top 10 best stocks to buy now – with dividends

While no best stocks to buy guide can provide a definitive list of recommended stocks, this guide aims to provide you with a review of some of the most highly recommended ones.

  • Smith & Nephew – as part of the FTSE 100, Smith & Nephew (LSE: SN) makes a variety of medical devices, including tools for surgery and joint replacements. With a well-balanced record of growth in earnings, revenue and cash flow, this business experiences steady demand and typically pays dividends twice a year.
  • DS Smith – another FTSE 100 firm, DS Smith (LSE: SMDS) is a packaging specialist that counts Amazon (UK) among its customers. Due to an increase in online shopping, the demand for corrugated packaging remains strong with growth anticipated in the future. DS Smith normally pays dividends twice a year.
  • Galliford Try – Galliford Try (LSE: GFRD) is a homebuilder that has experienced impressive growth over the past several months. Typically paying dividends twice a year, many advisors believe that it will continue to grow over the upcoming months.
  • Hochschild Mining – Hochschild Mining (LSE: HOC) is a precious metals miner and a member of the FTSE 250. Despite low gold and silver prices, Hochschild Mining continues to increase production and has a solid balance sheet. It also pays dividends twice a year, and gold and silver are certainly expected to rebound.

Advisors perceive these stocks as being among the best stocks to buy at the current time.

Ratgeberbilder Artikel Trading-Apps

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A review of some of the top 10 best stocks to buy now – without dividends

While the stocks listed above all provide dividends, those below remain some of the best stocks to buy currently that do not offer dividends. Profits for stocks that do not offer dividends are typically invested back into the company to spur on growth.

  • Ashtead Group – Ashtead Group is a FTSE 100 business with rental revenues in excess of £3.42bn in 2017. The pre-tax profit for this period was £927.3m, representing a 21% year-on-year increase. With an increasing number of people turning to rental properties over purchasing a home, earnings are expected to continue to grow. Double-digit profits are predicted for both this year and next, making this a solid choice for investors.
  • DCC – another FTSE 100 firm, DCC spent an impressive £670m on takeovers last year, with many acquisitions taking place in the US and Asia. The business provides support, marketing and sales services to a wide range of industries. Growth is forecast in the double digits for the current fiscal year ending in March 2019.
  • Bunzl – Bunzl may not be forecast to grow at the same measure as the aforementioned stocks, but it is expected to turn over solid single-digit profits for the next two years. Bunzl is a support services firm that has already made an impressive investment in acquisitions this year, with additional acquisitions expected in the future months.

As can be seen above, there are certainly exceptions to our preference for dividend-providing stocks.

Conclusion:

Conclusion

Having covered some basic guidelines for choosing the best stocks to buy, you cannot overlook the importance of performing a broker comparison prior to initiating your trading activities in order to make the most of your investments. Broker fees vary a great deal, as do the services they offer, so it is important to determine what services you require and take into consideration the variety of stocks that a given broker offers.

While we have provided a list of some stocks to consider when developing your own selection of stocks to buy, it is highly recommended that you make the effort to learn how to research stocks thoroughly so that you can be confident in making your own decisions on which stocks to trade and when.

As mentioned previously, investing in a meeting with a financial advisor to enhance your personal knowledge should never be considered a waste of money as it can vastly improve the speed at which you gain understanding.

As with any investment, it is advised when choosing the top 10 best stocks to buy now that you diversify your purchases to minimise the chances of a single event wiping out the value of your stock portfolio.

Stocks Highlights