Should You Buy Red-Hot Stocks Now or Wait?
Welcome to Episode #393 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey is going solo to discuss the roaring stock market. If you haven’t bought some of the hottest stocks on the Street, should you still dive in or is it too late to buy?
A friend of Tracey’s asked her over the weekend whether she should buy NVIDIA here. NVIDIA has been hitting new highs nearly every day. There is a fear of missing out, or “FOMO,” component to the stock now if you aren’t already in it. Waiting for a pullback seems useless as there hasn’t been one for weeks.
Not Just Tech Hitting New Highs
But the question of whether to buy or not after this rally isn’t just about technology stocks. The drug companies with weight loss drugs are also red-hot as are some of the restaurant stocks. Many industries, outside of the banks, oil and natural gas, lithium and the fertilizers, just to name a few, have been up big this year.
If you’re not yet in these stocks, should you wait for a pullback or should you just dive in?
Tracey looked at her favorite stock chart, the Zacks’ Price and Consensus chart, to try and find answers. But maybe the key is NOT the actual technical chart, but in the earnings outlook.
What do fundamentals look like?
5 Red-Hot Stocks: Should You Buy or Wait?
1. NVIDIA Corp. (NVDA)
NVIDIA has been one of the hottest stocks this year. It seemingly goes up almost every session. NVIDIA shares are up 80% year-to-date.
But earnings are expected to rise 79.2% in fiscal 2025 after jumping last year. NVIDIA trades with a forward P/E of 37, which isn’t high for the company historically. NVIDIA also has a PEG ratio of just 1.25. A PEG ratio under 1.0 indicates a company has both value and growth.
Is it too late to buy NVIDIA?
2. Dell Technologies Inc. (DELL)
Dell Technologies recently surprised on earnings again and its shares have taken off. Dell is up 55% year-to-date and is at 5-year highs.
Earnings are expected to rise just 0.7% in fiscal 2025 but 15.6% in fiscal 2026. Dell trades with a forward P/E of just 16.4 and a has a low PEG ratio of just 1.37.
Is it too late to buy Dell Technologies?
3. Eli Lilly and Company (LLY)
Eli Lilly is tracking NVIDIA in 2024. It seems like the stock hits a new high every day. Shares of Eli Lilly are up 33.8% year-to-date and 145% over the last year thanks to the demand for weight loss drugs.
Earnings are expected to soar 96.8% in 2024. Eli Lilly now has a high forward P/E of 62.5 but it has a PEG ratio of just 1.7.
Is it too late to buy Eli Lilly?
4. Chipotle Mexican Grill, Inc. (CMG)
Chipotle Mexican Grill continues to impress which is why it is often regarded as one of the top restaurant stocks. Shares of Chipotle are up 17.6% year-to-date but over the last year, they have soared 78.2% to new all-time highs.
Earnings are expected to rise another 18.3% in 2024. Chipotle isn’t cheap on a P/E basis but it hasn’t been for over a decade. Chipotle trades with a forward P/E of 51. It has a PEG ratio of 2.3.
Is it too late to buy Chipotle?
5. CAVA Group, Inc. (CAVA)
CAVA is one of the new up-and-coming restaurant chains. It only went IPO last year, in 2023. But shares of CAVA are up 38% year-to-date.
Earnings are expected to rise 9.5% in 2024 as it continues its growth plan of opening up new locations. CAVA has a sky-high forward P/E of 246, however. And CAVA doesn’t have a PEG ratio on Zacks.com.
Is it too late to buy CAVA?
What Else do you Need to Know About Buying Stocks During a Big Rally?
Tune into this week’s podcast to find out.
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Eli Lilly and Company (LLY) : Free Stock Analysis Report
Dell Technologies Inc. (DELL) : Free Stock Analysis Report
Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
CAVA Group, Inc. (CAVA) : Free Stock Analysis Report
