Catalysts are forming around a lot of the top stocks right now, making this a good time for investors to buy. Many companies are seeing a boost in their share price following strong earnings reports. Others are launching new products, winning approval from regulators and benefiting from increased consumer spending. Despite the market rotation that’s going on, a lot of companies are seeing momentum build in their share price.
For investors, the current situation presents an opportunity to take positions in great stocks, some of which are just now starting to come off 52-week lows. Buying as catalysts begin to drive share prices higher will lead to ample profits going forward. The key is to spot the top stocks to buy that have wind in their sails and are starting to move in a positive direction.
PayPal (PYPL)
Over the last 5 days, shares of PayPal Holdings (NASDAQ:PYPL) are up 13%. This growth has been driven by the announcement of second-quarter financial results that crushed Wall Street’s targets. PayPal reported EPS of $1.19, which beat Wall Street’s forecast of 99 cents. Revenue of $7.90 billion topped the $7.80 billion that was estimated. Additionally, PayPal said that its total payment volumes rose 11% to $416.80 billion, while transaction dollars increased 8% to $3.60 billion.
The strong financial results come after PayPal introduced several payment innovations earlier this year to attract more users and boost its financial performance. Innovations have included a faster checkout experience and A.I. generated recommendations from merchants to keep users engaged and returning to the platform. In terms of guidance, PayPal said that for the current third quarter, it expects mid-single-digit revenue growth and high-single-digit earnings growth.
Before the Q2 print, PayPal’s stock had declined 22% over the last 12 months. Now, things look to be turning around for the company and its shareholders.
Walt Disney Co. (DIS)
A look now at the summer box office, where Walt Disney Co. (NYSE:DIS) is the reigning champ. Disney’s new movie “Deadpool & Wolverine” earned a record amount of money at the box office during its debut weekend, taking in nearly $450 million in worldwide ticket sales. The film had the highest grossing debut ever for an R-rated movie. The strong box office performance is good news for Disney and its movie production and streaming units.
Disney has struggled since the pandemic with declining movie theater attendance and subpar box office performances of its films. However, Disney has now scored two major hits this summer with “Deadpool & Wolverine” and the animated movie “Inside Out 2,” which has earned more than $1.5 billion at the global box office and become the highest grossing animated movie ever. Disney also just announced a new slate of “Avengers” films that has the internet buzzing.
DIS stock has been languishing and is only up 3.5% this year. Now might be a good time to buy-the-dip. With the company’s box office receipts piling up, DIS now ranks among the top stocks to buy.
British Petroleum (BP)
Oil major British Petroleum (NYSE:BP) has just increased its quarterly dividend payment to shareholders by 10% as it reported a better-than-expected profit for this year’s second quarter. Going forward, BP will pay a quarterly distribution of 8 cents per share, up from 7.27 cents previously. The dividend increase lifts the yield on BP stock above 5%. The company also said that it plans to maintain its current rate of share buybacks at $1.75 billion during the current third quarter.
The dividend hike and stock buybacks were announced by BP along with decent Q2 financial results. The company announced a profit of $2.8 billion, which beat Wall Street expectations of $2.6 billion. The latest profit was ahead of the $2.7 billion that BP earned in the first three months of the year, and better than the $2.6 billion recorded a year ago. The profit got a boost from cost-cutting measures. In recent months, BP imposed a hiring freeze and halted renewable energy projects as part of efforts to improve performance.
BP stock also looks like one of the top stocks to buy on the dip. BP is flat on the year and trading at just 10 times future earnings estimates.
Pfizer (PFE)
U.S. pharmaceutical company Pfizer (NYSE:PFE) also just blew the doors off their hinges with its Q2 financial results. The company reported EPS of 60 cents, which was much better than the 46 cents forecast on Wall Street. Revenue of $13.28 billion surpassed the $12.96 billion that was expected among analysts. Sales were up 2%. While modest, it was the first time that sales had increased at Pfizer since the end of 2022 when the company’s Covid-19 revenue crested.
The strong Q2 results were attributed to cost-cutting measures, improved sales of the Covid-19 antiviral pill called “Paxlovid,” and strong non-Covid medication sales. The results represent a turnaround for Pfizer, which has struggled with a decline in demand for its Covid-19 products. As sales of its Covid-19 products have fallen, Pfizer has undertaken a cost-cutting drive that aims to deliver $4 billion in savings by the end of 2024.
Looking ahead, Pfizer expects earnings of $2.45 to $2.65 per share for all of this year, up from its previous guidance of $2.15 to $2.35 a share. The company also raised its revenue outlook to a range of $59.50 billion to $62.50 billion. That’s up from a previous revenue forecast of $58.50 billion to $61.50 billion. The company said the raised guidance reflects its strong performance. PFE stock is up 3% on the year and pays a quarterly dividend that yields 5.50%.
Apple (AAPL)
Consumer electronics giant Apple (NASDAQ:AAPL) has previewed its new suite of artificial intelligence features for its upcoming iPhone and analysts continue to be impressed. The new features include an enhanced Siri digital assistant and the ability to automatically generate both emails and images on the smartphone. There’s also improved photo searches and the ability to create and edit short movies.
Analysts continue to expect that the addition of AI will lead to a monster upgrade cycle for the iPhone, especially since the AI system will only work on the iPhone 15 and newer. Within the next year, Apple plans to add more AI features to the iPhone, including Emoji generation, automated photo clean-up, and OpenAI’s ChatGPT technology. It could all lead to big future iPhone sales. AAPL stock is up nearly 20% this year.
Novo Nordisk (NVO)
Pharmaceutical company Novo Nordisk (NYSE:NVO) has had a run of very good news lately concerning its medications. The E.U. has just approved the company’s Wegovy weight loss drug to treat heart conditions in adults. The move opens an entirely new market for Wegovy and comes after clinical trials showed the medication reduced the risk of major cardiovascular events by 20% and the risk of cardiovascular death by 15%.
The expansion of Wegovy’s use across Europe came days after medical regulators in the U.K. also approved Wegovy to treat heart conditions and strokes. In June, Wegovy was approved as a weight loss treatment in China, opening a huge new market for the medication in that nation of 1.4 billion people. If all that weren’t enough, a new study has found that another Novo Nordisk drug may slow the progression of Alzheimer’s disease in people by protecting their brains.
NVO stock is one of the top stocks to buy. It has risen over 60% in the last 12 months and continues to have momentum.
Deckers Outdoor (DECK)
Another quarter and another earnings beat from Deckers Outdoor (NYSE:DECK). The shoemaker behind popular brands such as Hoka and Uggs delivered Q2 financial results that trounced Wall Street forecasts on the top and bottom lines. The company reported EPS of $4.52 per share, which surpassed consensus expectations of $3.46. The profit was up 87% from a year ago.
Revenue totaled $825 million, which topped Wall Street’s estimate of $805 million. Sales rose 22% year-over-year. The company, which also makes Teva sandals, reported that its gross margin during the quarter rose to 56.9% from 51.3%. The latest financial results come shortly after Deckers Outdoor announced a six-for-one stock split that will take place on Sept. 9 of this year. The company also has a new CEO in Stefano Caroti, a long-time executive at Deckers Outdoor who has vowed to continue the strong growth.
DECK stock has risen nearly 70% in the last 12 months and continues to be a runaway growth story and one of the top stocks to buy now.
On the date of publication, Joel Baglole held a long position in DECK. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.