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Which are the Best Stocks to Buy or Invest In?

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Find Out Which Stocks Prudent Investors are Purchasing

The best stock for someone to buy depends on what type of investor he is. The two types that will be discussed here are buy and hold investors, and people who like to trade high growth rocket stocks.

Best Stocks for Buy and Hold Investors

Regardless of the advice to the contrary, some investors will hold in any market. If that is the case, then this investor needs a fundamentally sound company with steady growth. The screener link here will provide such a list. Here are the criteria for the stock selection:

  • Mid-Cap and larger
  • Analyst recommendation of buy and better
  • High and increasing institutional ownership
  • Steady long-term growth and projected five year growth
  • Over 10 dollars per share
  • Low debt

By choosing quality stocks, the buy and hold investor should realize good share price appreciation in bull markets while having the ability to hang onto some of those gains during bear markets. This style of trading is often best for investors that want to purchase shares and then forget about it over the next five to ten years.

Another value screen that looks for undervalued stocks similar to the ideologies of Warren Buffett and Benjamin Graham can he found here.

Top Stocks to Own for High Growth Investors

This type of investor often wants larger gains. To do so, he will need a hands-on approach to his investments. He knows that while high growth stocks soar in bull markets, they often crash the hardest in bear markets. This investor will attempt to trade in line with the current market sentiment, not going against the trend.

Here is a list of high growth stocks that have a chance to appreciate in the near future. The criteria for this group of stocks are:

  • Stock is expected to experience over 25% EPS growth over five years
  • Quarter over quarter EPS growth greater than 25%
  • Net positive institutional transactions
  • Analyst recommendation of buy and better
  • Stock options available

While the high growth screening list seems similar to the buy and hold, it is different in a few key ways. First, any capitalization is acceptable as high growth stocks are often smaller companies. The growth required is obviously much more aggressive. This style is quite similar to William J. O’Neil’s CAN SLIM approach.

Debt is not so much an issue since start-up companies usually need to borrow capital. The high growth screening list provided has been sorted to list the companies first that have the highest net positive institutional transactions first. As well, only stocks with options available are listed. This has been filtered so investors who wish to buy Call options instead of purchasing the underlying asset may do so.

The Tale of Two Trading Methods

Whether someone chooses high quality stocks and holds for an extended period of time, or actively trades stocks that rocket up and down with the market, is a choice they must make alone. Forcing a certain strategy upon a person is like buying clothes for a blind date; the size and style may not match the person.

If a person finds that his mentality and trading style fits the high growth strategy, then he needs to do some research into timing his trades based on charts. One such strategy is listed here. Or he could choose to limit his downside risk with a Put option contract which is detailed in the strategy here.

Ultimately the best stocks to buy in any market, whether growth or value based, depends on the investor.