Best Stocks To Buy Now The S&P 500 started off the year 2024 with a bang, hitting new all-time highs in January after ending 2023 on a high note. The market rally continues to thrive, with investor optimism outweighing concerns about inflation, interest rates, potential recession, and global geopolitical tensions – at least for now. While it’s impossible to predict how long this rally will last, investors should remain cautious and keep an eye on economic indicators and any potential risks that could impact the market’s performance. A diversified investment strategy can help mitigate some of these risks and protect against volatility.

Despite the bullish run in the stock market, there are still risks and uncertainties that investors should consider. The US economic outlook remains uncertain, and the approaching 2024 presidential election could add to the volatility. As a result, investors need to be cautious in their investment choices. Recently, Bank of America released a list of top stocks to buy now that could help investors navigate this unpredictable environment. These stocks have been selected based on their growth potential, solid fundamentals, and attractive valuations. Investors who are looking for long-term gains should consider these stocks as they offer excellent opportunities for growth and stability.

The 8 Best Stocks To Buy Now

Company (Ticker)	Forward P/E Ratio
American Homes 4 Rent (AMH)	58.3
Citigroup (C)	7.6
Fidelity National Information Services (FIS)	14.0
Humana (HUM)	14.8
Intuitive Surgical (ISRG)	52.8
Lear (LEA)	7.4
Trex (TREX)	41.7
Union Pacific (UNP)	19.7

8 Best Stocks To Buy Now in 2024 Our Detailed List

American Homes 4 Rent (AMH)

Why We Picked It

American Homes 4 Rent specializes in the ownership and management of single-family homes in the Sun Belt region. Analyst Joshua Dennerlein predicts positive growth for the rental market by 2024. The company can increase its market share through property acquisitions and developments. With a strong reputation for providing attractive housing options and excellent customer service and property management, American Homes 4 Rent aims to solidify its position as a leading rental home provider in the United States. Their focus on quality properties, responsive customer care, and efficient property management practices positions them well to meet the increasing demand for rental homes in the Sun Belt region of the United States.

According to Dennerlein, there may be a surge in the demand for single family housing rentals in the coming years. As millennials have surpassed the peak age for renting apartments (32), the demographic shift is moving towards SFR, with an average renter age of 39. This trend suggests that more people are looking for spacious living arrangements that offer privacy and flexibility. Single family rentals provide these benefits and are becoming increasingly popular among renters. This shift in demand could present opportunities for real estate investors and developers to capitalize on this growing market. Bank of America has assigned a “buy” rating to AMH stock with a price target of $44.

Citigroup (C)

Why We Picked It

Citigroup is a leading financial services company with a diverse customer base that spans the globe. The company’s Citibank division is regarded as one of the largest players in the banking industry. With a strong presence in multiple markets, Citibank offers a range of financial products and services to its customers, including credit cards, mortgages, personal loans, and investment products. The company has a reputation for innovation and has been at the forefront of technological advancements in the banking industry. Its commitment to providing exceptional customer service, coupled with its extensive network of branches and ATMs, makes it an attractive option for customers looking for reliable financial services.

Analyst Ebrahim Poonawala suggests that Citigroup CEO Jane Fraser is introducing bold strategies to overhaul and enhance the company. He also believes that Citigroup has the potential to increase earnings per share in 2024 and beyond. As Wall Street gains more understanding and faith in Citi’s fundamental earnings direction, Poonawala anticipates that the stock could experience considerable valuation growth.

Poonawala states that with a trading value at 0.5 times TBV and a 2024 P/E of 8.3 compared to the mega-cap peer median of 11.4, Citigroup is poised for a favorable risk/reward due to its valuation discount and potential for return on tangible common equity. Bank of America has given a “buy” rating and set a price target of $60 for C stock.

Fidelity National Information Services (FIS)

Why We Picked It

Fidelity National Information Services (FIS) is a renowned global provider of financial technology solutions that specialize in serving merchants, banks, and capital market firms. The company offers an array of innovative products and services that cater to the unique needs of their clients. FIS’s cutting-edge technology enables businesses to streamline their operations, enhance customer experiences, and improve overall efficiency. With a presence in over 130 countries worldwide, FIS has established itself as a trusted partner for businesses seeking reliable financial technology solutions.

Analyst Jason Kupferberg believes that the sale of a 55% stake in Fidelity National’s Worldpay Merchant Solutions business will enhance Fidelity National’s financial visibility, potentially removing a hindrance on growth and investor sentiment. After the transaction, Kupferberg anticipates that Fidelity National will have a streamlined business model, substantial recurring revenue, and the potential for strong shareholder returns through dividend payments and share buybacks.

He states that the company’s early 2024 guidance may serve as a positive factor. “Once this guidance is released, we anticipate heightened investor interest in the stock, as it will provide a clear set of disclosed numbers,” Kupferberg explains. Bank of America has assigned a “buy” rating and a price target of $72 to FIS stock.

Humana (HUM)

Why We Picked It

Humana is a well-known health insurance company that provides extensive managed healthcare plans and associated services to the U.S. military, individuals, and groups. The company offers a variety of plans to accommodate different healthcare needs and financial situations, such as Medicare Advantage, Medicaid, employer-sponsored plans, and individual health plans. Humana’s emphasis on preventive care and wellness initiatives distinguishes it from other insurance providers, making it a favored option for individuals seeking high-quality healthcare coverage. With its extensive healthcare provider network and dedication to customer satisfaction, Humana remains a frontrunner in the health insurance sector.

Analyst Kevin Fischbeck suggests that Humana could achieve an earnings per share (EPS) of $37 by 2025, up from its current EPS of approximately 24. Despite the abandonment of Cigna’s acquisition plan in December 2023, Fischbeck opines that Humana’s withdrawal from the deal indicates the company’s positive internal growth prospects. This indicates Humana’s confidence in its capacity to sustain growth and enhance profitability through alternative avenues. Therefore, investors should closely monitor Humana’s growth initiatives and financial results in the forthcoming years.

He thinks that Humana’s financial performance in February will be critical for the stock’s potential to rise. “Moving into 2024, HUM can restore confidence by meeting or exceeding the health care industry’s market growth rate and showing some margin improvement,” Fischbeck remarks. He also states that HUM expects an 11% earnings increase in 2024.Bank of America has assigned a “buy” rating and set a price target of $640 for HUM stock.

Intuitive Surgical (ISRG)

Why We Picked It

Intuitive Surgical is a healthcare equipment company that has revolutionized the field of surgery with its innovative da Vinci Surgical System. The system employs computerized visualization technology and advanced robotics to perform minimally invasive surgeries, reducing patient trauma and recovery time. The system is operated by a highly skilled surgeon who controls the instruments through a console, providing greater precision and accuracy compared to traditional surgical methods. The da Vinci Surgical System has been used in various surgical procedures, including urology, gynecology, and general surgery.

Analyst Travis Steed has identified Intuitive Surgical as one of his top stock picks for 2024. According to Steed, the stock represents a focused investment in soft tissue robotic surgery, which is considered the most promising growth market in the entire medtech industry. He believes that Intuitive has the potential to significantly increase its annual earnings per share in the coming years, even without introducing a new surgical system product

According to Steed, the implementation of a new system could potentially serve as a significant catalyst to drive the stock higher. This would mark the beginning of a fresh three-to-five-year cycle for earnings upgrades. As such, investors and stakeholders are keeping a close eye on this development to assess its impact on the company’s financial performance and overall market value. The successful adoption and integration of this new system could bring about increased efficiency, productivity, and profitability, leading to a positive outlook for the company’s future growth prospects. Bank of America has assigned a “buy” rating and set a price target of $400 for ISRG stock.

Lear (LEA)

Why We Picked It

Lear is a leading supplier of seating and electric power management systems to the global automotive industry. With a presence in 39 countries, Lear is committed to providing exceptional service and support. Their high-quality products prioritize customer safety, comfort, driving experience, efficiency, and emissions reduction

According to analyst John Murphy, Lear stands out from other auto suppliers due to its exceptional track record of industry-leading growth, above-average margins, impressive cash flow, and capital distributions. Furthermore, Lear’s E-Systems segment provides the company with exposure to some of the most attractive growth trends in the auto industry, such as electrification and connectivity. With this said, it is evident that Lear has a competitive edge in the market as it continues to innovate and adapt to changing industry trends. The company’s focus on sustainability and innovation will undoubtedly drive its success in the future.

According to Murphy, the recovery of global auto production volumes and margin expansion are potential catalysts for an increase in Lear’s share price in the near term. Murphy believes that increasing production volume is crucial for Lear to attain operating leverage as it can leverage its fixed costs on a larger base. The company’s ability to expand margins and benefit from economies of scale by increasing production could lead to a boost in investor confidence and positively impact the company’s stock price. Bank of America has assigned a “buy” rating to LEA stock and set a price target of $220.

Trex (TREX)

Why We Picked It

Trex is a leading manufacturer of composite decking and railing products worldwide. Established in 1996, it has since become the largest producer of such products. Its popularity can be attributed to its innovative approach to creating eco-friendly outdoor living solutions that are both durable and low-maintenance. The company’s product line includes a wide range of decking and railing options, all designed to elevate outdoor spaces while minimizing environmental impact.

Analyst Rafe Jadrosich predicts that Trex will benefit from several factors driving sales growth, enabling the company to surpass its projected long-term revenue growth of 11% to 13% in 2024. The transition from wood has contributed to the superior growth of composite decking compared to other building product categories. Furthermore, Jadrosich highlights Trex’s promising lineup of upcoming product releases, as the company has effectively ventured into related products like fasteners and entry-level railing. Trex is also capturing market share from its competitors.

Jadrosich believes that a higher target multiple is reasonable, considering the current low-interest rate environment and the projections for above-average growth in 2024. This means that the company is anticipating favorable economic conditions in the future, which could lead to increased revenue and profitability. Ultimately, the decision to set a higher target multiple will depend on a variety of factors, including market conditions, industry trends, and the company’s financial performance. Bank of America has given TREX stock a “buy” rating and set a price target of $90.

Union Pacific (UNP)

Why We Picked It

Union Pacific is a renowned transportation company that owns and operates an extensive network of over 32,000 miles of railroad tracks in the western two-thirds of the United States. The company serves 23 states and has a workforce of over 32,000 employees who work tirelessly to ensure efficient transportation of goods and materials across the country. With a history dating back to 1862, Union Pacific has played an integral role in shaping the growth and development of America’s railroads and continues to be a vital part of the country’s logistics infrastructure today.

Analyst Ken Hoexter predicts that Union Pacific’s continuous network restructuring will enable the company to enhance its service quality, positioning it to operate with greater efficiency and capture a larger market share. Hoexter highlights the positive influence of new CEO and precision-scheduled-railroading (PSR) expert Jim Vena on Union Pacific’s operating metrics since assuming the role in August 2023. He anticipates that Union Pacific will achieve a 59% operating ratio in 2024, marking a 3.2% increase from the levels in 2023.

According to a financial analyst, Union Pacific has the potential for significant earnings growth due to its improving market conditions, increased market share, improved service quality, and operational efficiency in its rail franchise. These factors are expected to provide solid operating leverage and contribute to outsized earnings potential for the company. As one of the best-in-class operators in the rail industry, Union Pacific is well-positioned to capitalize on these opportunities and continue delivering value to shareholders. Bank of America has assigned a “buy” rating and set a price target of $271 for UNP stock.

How To Start Investing in Stocks Today

When it comes to investing in stocks, the most critical aspect is understanding how to start investing. The first step is creating an investment plan, and that involves answering three crucial questions. Firstly, what are your financial goals? It’s important to have a clear idea of what you want to achieve through investing in stocks. Next, determine how much time you have to achieve those goals. The time horizon for achieving your financial targets can greatly influence your investment approach. Lastly, evaluate how much portfolio anxiety you can tolerate while working towards your goals.

It’s essential to be aware of your risk tolerance level and choose investments that align with it. Creating an investment plan and answering these questions can help you start investing confidently and make informed decisions when it comes to buying stocks. Your risk tolerance determines the answer to the third question. It may be categorized as low, moderate, or high, and can indicate the proportion of your portfolio allocated to assets such as stocks. Stocks typically undergo greater fluctuations compared to bonds and other investment types as they tend to rise and fall over time.

What to Look for When Buying Stocks

It is crucial to conduct thorough research and take into account the various factors that can influence the performance of each company when purchasing stocks. Here are the key aspects to be mindful of:

• Fundamentals. Start by researching the company’s financial statements, such as their revenue, earnings, profit margins and debt-to-equity ratio. Figures like these help you determine the company’s overall financial health and whether its stock is a worthwhile investment.
• Industry trends. Understand trends in the company’s industry. Research reports, news and analyst predictions like the ones outlined above to get a better sense of where the industry is heading.
• Management. The experience and track record of a company’s management team can significantly impact its success. Look at their history of decision-making, leadership and overall strategy.
• Competitive advantage. Look for companies with a competitive advantage over their peers, such as strong brand recognition or unique intellectual property. This can give them an edge in the market and help the stock sustain appreciation and dividend payouts over time.
• Valuation. Evaluate if the stock is priced higher or lower than comparable companies in the same industry. Utilize metrics such as price-to-earnings ratio, price-to-sales ratio, and price-to-book ratio to assess the stock’s value.
• Dividend yield. It is important to seek out stocks with a respectable dividend yield, as dividends can ultimately contribute significantly to your investment returns.
• Risks. Each investment carries risks, so it’s important to evaluate the risks linked to the stock you are considering buying. Consider aspects such as the company’s debt, industry volatility, and geopolitical risks that could affect its performance.

Different Ways To Invest In Stocks

There are many different ways to invest in stocks. Some of the most common include:

• Investing directly in individual stocks on the stock market
• Investing indirectly through conventional mutual funds and ETFs
• Investing indirectly through closed-end funds
• Investing indirectly through investment pools known as collective investment funds, which are often run by banks and trust companies and are primarily part of a workplace retirement plan or stock bonus plan
• Investing indirectly through so-called derivatives, which are financial contracts—such as futures contracts—with values based on underlying assets

Alternatives To Investing in the Stock Market

If you prioritize the growth of your principal, there are alternative investment options beyond the stock market. These investment options include:

• Hedge funds
• Private real estate
• Collectibles
• Private equity
• Cryptocurrencies
• Private debt and venture debt
• Derivatives
• Commodities, such as oil, precious metals and agricultural products.

Alison Staloch, CFO of Fundrise, states that alternative investments usually have two characteristics. Firstly, their investment returns are often not linked to the performance of publicly traded markets, meaning they tend to move differently. Secondly, their underlying investments are not traded on public exchanges.

Methodology

Bank of America’s equity analyst team compiles a list of its highest-conviction stock ideas for each quarter based on fundamental analysis. The list is accompanied by unique catalysts that are expected to occur before the quarter ends, which provides investors with a valuable insight into what to expect in the upcoming months. This approach helps investors assess different investment opportunities and make informed decisions about their portfolio. Additionally, it enables them to stay up-to-date with market trends and take advantage of potentially profitable trading opportunities.

The Top 10 U.S. Ideas list by Bank of America features stocks that are evaluated by their analysts and tend to stay on the list for a quarter, unless an analyst’s recommendation changes or coverage is dropped. This list comprises both long and short ideas, but only the firm’s long ideas make it to the stock recommendations included in this list. The purpose of this list is to provide investors with valuable insights into some of the best investment opportunities available in the market. By following this list, investors can gain a better understanding of which stocks Bank of America considers to be high-potential investments.

Best Stocks To Buy Now in 2024: Frequently Asked Question

Do I need a broker to buy stocks?

In order to purchase stocks, it is necessary to engage the services of a broker. Brokers are licensed professionals capable of executing stock transactions on your behalf. It is crucial to conduct thorough research and comparison of various brokers to identify the most suitable one for your specific needs and investment objectives.

How can I buy stocks online?

To purchase stocks online, it is necessary to create an online brokerage account. Although certain brokers are conventional physical firms, online brokerages provide commission-free trading and minimal fees.

How much should I invest in stocks?

The amount to invest in stocks is determined by your individual financial objectives and risk tolerance. A general guideline is to allocate 5% to 10% of your overall portfolio value to individual stocks and the remainder to diversified funds.

How do stocks perform when interest rates are high?

Generalizing is difficult, but elevated interest rates lead to increased borrowing costs for companies, potentially harming their earnings and profitability. Moreover, higher interest rates can make bonds and other fixed-income investments more appealing to investors, diverting funds from the stock market. It is essential to understand that the connection between interest rates and the stock market can be intricate, and there are numerous other elements that can influence stock performance, including the general economic conditions, specific company factors, and investor outlook.

How do I pick the right stock?

Successfully picking stocks involves buying at a low price and selling at a high price, but there are various methods to achieve this. One approach is to predict which stocks will grow their earnings. The objective of traditional stock selection in fundamental analysis and technical analysis is to anticipate increases in earnings. David Blaylock, who is the director of advice and compliance for RIA firm Origin, suggests that the key to picking the right stocks is to invest in companies whose potential for future profits aligns with your investment time frame and that you understand well.