Cream of the Crop Part II: 3 (More) Must-Buy Stocks From IBD’s Top 50
Investor’s Business Daily’s IBD 50 is a weekly, computer-generated stock index that identifies the potential top 50 growth stocks. I’ve found that it’s a great way to identify growth names before the media starts covering them. The IBD 50 actually helped me discover one of my most successful stock picks yet, Super Micro Computers (NASDAQ:SMCI). I discovered other stocks to buy from IBD’s Top 50 that have performed extremely well — MakeMyTrip (NASDAQ:MMYT), e.l.f. Beauty (NYSE:ELF) and ServiceNow (NYSE:NOW).
With investors becoming much more upbeat about the macro outlook of growth stocks, now is an excellent time to review and buy some of the options that appear on the list. Here are three more stocks to buy from IBD’s Top 50.
Vertiv Holdings (VRT)
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Vertiv (NYSE:VRT) provides power management products and monitoring systems for datacenters.
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Due to the huge amount of data needed to support artificial intelligence systems, data center demand is surging, which is causing Vertiv’s sales and profits are growing rapidly. Last quarter, its top line jumped 12.7% versus the same period a year earlier, while its orders (excluding acquisitions) soared 23% year-over-year. The firm’s free cash flow advanced $162 million versus Q4 of 2022 to $305 million.
““We see tremendous opportunity ahead as the data center needs of AI drive additional market demand,” CEO Giordano Albertazzi announced with the company’s Q4 earnings release.
IBD gives Vertiv a very high Composite Rating of 98 out of 99. On the other hand, the shares have a low Accumulation/Distribution grade of C-, indicating that institutional investors have not not bought a great deal of the name in the last 13 weeks. But that opens the door for institutions to step up their buying of VRT in the coming weeks. VRT’s large leverage to the AI trend and strong financial results make it one of the best stocks to buy from IBD’s Top 50.
GigaCloud (GCT)
Source: Shutterstock
GigaCloud (NASDAQ:GCT) brokers deals between e-commerce retailers and suppliers, as well as manages logistics and warehousing for these retailers and passes along information about suppliers.
According to Seeking Alpha columnist Michael Wiggins De Oliveira, GigaCloud is growing at a CAGR of about 40%. Moreover, the shares are changing hands at a low forward EBITDA/price rate of just nine times.
Also importantly, as of last September 30, GCT had a rather large network of “741 active 3P sellers and 4,602 active buyers.”
GCT has the highest possible Composite Rating of 99 from IBD, along with an Accumulation/Distribution grade of A-, showing that large investors have been rapidly buying the shares over the last 13 weeks.
Netflix (NFLX)
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Netflix (NASDAQ:NFLX) is one of the leaders in the rapidly growing streaming sector — and the company has become highly profitable. As of November 2023, its ads were reaching 15 million viewers — up from 5 million six months earlier.
The rapid growth bodes well for its long-term outlook, since the company says that it earns more revenue per user from its ad-supported offerings than its ad-free tiers. Last quarter, the company’s top line climbed an impressive 12.5% versus the same period a year earlier to $8.8 billion, while its net income soared to $938 million from $55 million in Q4 of 2022.
On January 30, Bank of America named Netflix as one of its “best investment ideas.”
The shares have a perfect 99 Composite Score from IBD and an Accumulation/Distribution grade of A+, indicating that large institutions have been buying a large amount of the shares over the past 13 weeks.
On the date of publication, Larry Ramer held a long position in SMCI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.
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