In this article, we will discuss the 10 Best Breakout Stocks To Buy Now. You can skip our detailed overview and go directly to the 5 Best Breakout Stocks To Buy Now.
Investing in the stock market is no easy feat and requires an educated mind and a well-defined strategy to pick stocks, especially in challenging market conditions as we have today. There are two main methods of stock-picking employed by investors around the world: Fundamental analysis and Technical analysis. Fundamental analysis employs a “fundamental” approach to selecting companies which means evaluating the business model of the company, the competence of the management, and the outlook for the future. The technical analysis, on the other hand, is done based on charts with pricing and volume data. Some people use technical analysis as their primary method of analyzing financial markets, while others use it in combination with other methods such as fundamental analysis or market news. Additionally, the popularity of technical analysis can vary from market to market and from one time period to another. In general, technical analysis is a widely used approach in the financial industry and is considered a useful tool for many traders and investors.
The term “breakout” in technical analysis refers to a situation in which the price of a stock moves significantly above or below a key technical level, such as a moving average or a trend line. This type of breakout can indicate a change in the stock’s trend, attracting the attention of traders and investors. Traders and investors often monitor technical breakouts as they can provide potential buy or sell signals.
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There are several types of technical breakouts that can occur in the stock market, including:
Breakout from a range: This occurs when the price of a stock moves above or below a range that it has been trading within for a period of time.
Breakout from a trend line: This occurs when the price of a stock moves above or below a trend line that has been defining the stock’s trend.
Breakout from a moving average: This occurs when the price of a stock moves above or below a moving average.
The Innovator IBD Breakout Opportunities ETF is designed to track the performance of IBD Breakout Stocks Index. The IBD Breakout Stocks Index is a stock market index that tracks the performance of a group of stocks that are showing strong technical momentum and are breaking out of trading ranges or other technical patterns. The IBD Breakout Stocks Index is intended to provide investors with a benchmark for tracking the performance of stocks that are showing strong technical momentum and may be poised for further price appreciation. The index is typically made up of a diverse group of stocks from a variety of sectors, and it is rebalanced on a regular basis to ensure that it reflects the current market environment. Some of the leading holdings of the ETF are American International Group, Inc. (NYSE:AIG), ATI Inc. (NYSE:ATI), Pfizer Inc. (NYSE:PFE), and Illinois Tool Works Inc. (NYSE:ITW).
Our Methodology
We used Innovator IBD Breakout Opportunities ETF’s (BOUT) top 15 holdings to shortlist breakout stocks and picked 10 of these stocks that are the most popular among the 920 hedge funds tracked by Insider Monkey.
10 Best Breakout Stocks To Buy Now
10. ATI Inc. (NYSE:ATI)
Number of Hedge Fund Holders: 27
ATI Inc. (NYSE:ATI) is an American specialty metals company that produces a range of advanced materials and components for the aerospace, defense, energy, and other industrial markets. ATI Inc. (NYSE:ATI)’s products include stainless and specialty steels, titanium and titanium alloys, and other advanced alloys, as well as a range of fabricated and finished parts and components. The company operates a number of manufacturing facilities in the United States, Europe, and Asia and has a global customer base.
On November 2, 2022, ATI Inc. (NYSE:ATI) reported its Q3 2022 result. The revenue of the company was reported at $1.03 billion, beating market expectations by $95.20 million. The company’s Normalized EPS for the quarter stood at $0.53.
According to Insider Monkey’s database, 27 hedge funds had stakes in ATI Inc. (NYSE:ATI) at the end of the September quarter. D E Shaw remained the leading stakeholder of the company at the end of the third quarter.
In addition to ATI Inc. (NYSE:ATI), American International Group, Inc. (NYSE:AIG), AstraZeneca PLC (NASDAQ:AZN), and Pfizer Inc. (NYSE:PFE) are included in our list of 10 best breakout stocks to buy now.
9. Illinois Tool Works Inc. (NYSE:ITW)
Number of Hedge Fund Holders: 27
Illinois Tool Works Inc. (NYSE:ITW) is an American multinational corporation that produces a wide range of industrial products and equipment. It operates in more than 60 countries and has a diverse portfolio of products and brands that serve a variety of industries, including automotive, construction, food and beverage, and energy.
On October 26, 2022, Jamie Cook, an analyst at Credit Suisse, increased his price target on Illinois Tool Works Inc. (NYSE:ITW) to $243 while keeping an Outperform rating on the stock. The analyst’s outlook is based on the business recording robust organic in Q3 and strong margin performance.
At the end of Q3 2022, 27 hedge funds in Insider Monkey’s database were long on Illinois Tool Works Inc. (NYSE:ITW) at the end of the quarter. Fisher Asset Management remained the leading stakeholder of the company at the end of Q3 2022.
8. Essential Utilities, Inc. (NYSE:WTRG)
Number of Hedge Fund Holders: 29
Essential Utilities, Inc. (NYSE:WTRG) provides water, wastewater, and natural gas services to customers in several states in the United States. It is the holding company for several subsidiaries that operate in different states, including Aqua America, Inc., which provides water and wastewater services.
On November 7, 2022, Essential Utilities, Inc. (NYSE:WTRG) reported its third-quarter result, posting revenue of $434.62 million for the quarter. The company’s Normalized EPS was reported at $0.26, beating market expectations by $0.04.
29 hedge funds were long on the company’s stock at the end of the third quarter, according to Insider Monkey’s database. Impax Asset Management had the biggest long position in the company at the end of Q3 2022.
7. Academy Sports and Outdoors, Inc. (NASDAQ:ASO)
Number of Hedge Fund Holders: 31
Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is an American sporting goods retailer that operates more than 250 stores in 16 states across the southern and midwestern United States. The company is headquartered in Katy, Texas, and was founded in 1938. Academy Sports and Outdoors, Inc. (NASDAQ:ASO) offers a wide range of products for a variety of sports and outdoor activities, including hunting, fishing, camping, and athletics.
On December 14, 2022, Anthony Chukumba, an analyst at Loop Capital, increased his price target on Academy Sports and Outdoors, Inc. (NASDAQ:ASO) to $65 while keeping a Buy rating on the stock. The analyst is impressed with the success of Academy Sports and Outdoors, Inc. (NASDAQ:ASO) under its present management team and thinks the business is still in the early stages of a protracted, multiyear turnaround.
According to Insider Monkey’s database, 31 hedge funds held stakes in Academy Sports and Outdoors, Inc. (NASDAQ:ASO) at the end of the third quarter ending September 2022. Renaissance Technologies remained the leading stakeholder in the company at the end of Q3 2022.
6. Nexstar Media Group, Inc. (NASDAQ:NXST)
Number of Hedge Fund Holders: 32
Nexstar Media Group, Inc. (NASDAQ:NXST) is an American media company that operates television stations and websites in various markets across the United States. It is one of the largest broadcasters in the United States, with more than 200 television stations in 115 markets. Nexstar Media Group, Inc. (NASDAQ:NXST)’s television stations include affiliates of major networks such as ABC, CBS, NBC, and FOX, as well as independent stations. The company also operates a number of digital media properties, including websites, mobile apps, and over-the-top (OTT) platforms.
On November 11, 2022, James Goss, an analyst at Barrington, reduced his price target on Nexstar Media Group, Inc. (NASDAQ:NXST) to $200 from $240 while keeping an Outperform rating on the company’s stock. According to the analyst, the company’s third-quarter revenues were below expectations, and EBITDA slightly decreased due to a miss on revenue.
As per Insider Monkey’s database, 32 hedge funds remained bullish on Nexstar Media Group, Inc. (NASDAQ:NXST) at the end of the third quarter. Cardinal Capital had the biggest stake in the company at the end of the third quarter.
In its Q1 2022 investor letter, Richie Capital Group, an asset management firm, highlighted a few stocks and Nexstar Media Group, Inc. (NASDAQ:NXST) was one of them. Here is what the fund said:
Nexstar Media Group (NXST up 24.8%) – The television broadcasting and digital media company surged during the quarter after presenting at an investor conference where management pointed to a strong 2022 for both political advertising and retransmission. They have exposure to more than 80% of markets with competitive mid-term political races. NXST is developing new ad categories such as sports betting and they are focused on expanding digital ad revenue and providing digital solutions to local advertisers. Auto advertising will return in the fall as auto dealerships re-enter the market to sell their replenished inventory.
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Disclosure: None. 10 Best Breakout Stocks To Buy Now is originally published on Insider Monkey.
