In this article, we take a look at 15 best NASDAQ stocks to buy now. If you want to see more best NASDAQ stocks to buy, go directly to 5 Best NASDAQ Stocks to Buy Now.
The Nasdaq Composite or simply the NASDAQ index is a market weighted index of more than 3,000 stocks listed on the Nasdaq stock exchange, which is also known as ‘The NASDAQ Stock Market’.
Given many technology companies are listed on the Nasdaq stock exchange, the NASDAQ includes many technology companies in its index. Because it is a market weighted index, companies with larger market capitalizations make up more of the index than smaller companies do.
Considering that some tech companies listed on the Nasdaq stock exchange have grown into some of the largest in the world, technology accounts for a significant percentage of the index’s weight.
As a percentage, technology companies account for a bigger percentage of the NASDAQ index than they do for other notable indexes such as the Dow Jones Industrial Average or the S&P 500.
While the NASDAQ is known for being technology heavy, the index also includes companies in other industries as well.
Blue Chip Companies
Some of the technology companies listed on the NASDAQ and some of the companies in other industries listed on the index have done well over time given their strong businesses.
With competitive advantages and growth, some of those leading businesses listed on the NASDAQ have increased their earnings per share significantly and the stock prices of those companies have done well in the long run.
2022
2022 has been a challenging year for the market as the Federal Reserve has increased interest rates seven times to fight inflation. Although inflation has been lower than expected in October and November, many analysts expect the U.S. central bank to continue to raise rates further next year. As a result, many economists think there could be a recession next year.
Given the headwinds, the NASDAQ index has declined over 33% year to date while the Dow Jones Industrial Average has retreated slightly over 10% and the S&P 500 has fallen over 20%.
With the decline, some quality companies listed on the NASDAQ are arguably trading below their intrinsic values in the long term. If economic data fails to meet expectations, however, they could still decline further in the near term.
Given the uncertainty, it could be a good idea for long term investors to own a well diversified portfolio of stocks across many different sectors.
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Methodology
For our list of 15 Best NASDAQ Stocks to Buy Now, we picked 15 stocks with competitive advantages that are listed on the Nasdaq stock exchange.
We ranked the stocks based on the number of hedge funds in our database that owned shares of the same stock at the end of the third quarter.
For those of you interested, also check out 11 Cheap NASDAQ Stocks to Buy.
15 Best NASDAQ Stocks to Buy Now
15. Huntington Bancshares Incorporated (NASDAQ:HBAN)
Number of Hedge Fund Holders: 23
Although its shares are down 11.2% year to date, Huntington Bancshares Incorporated (NASDAQ:HBAN)’s stock has nevertheless more than doubled since 2012 as the EPS of the regional bank have increased. While the bank earned $0.69 per share in 2012, analysts think Huntington Bancshares Incorporated (NASDAQ:HBAN) could earn $1.44 per share in 2022, $1.56 per share in 2023 and $1.63 per share in 2024.
Of the 920 hedge funds in our database, 23 owned shares of Huntington Bancshares Incorporated (NASDAQ:HBAN) at the end of the third quarter, ranking the stock #15 on our list of 15 Best NASDAQ Stocks to Buy Now.
14. Interactive Brokers Group, Inc. (NASDAQ:IBKR)
Number of Hedge Fund Holders: 35
While broader market values have weakened this year, the earnings results of automated global electronic broker Interactive Brokers Group, Inc. (NASDAQ:IBKR) have been strong. For Q3, Interactive Brokers Group, Inc. (NASDAQ:IBKR) earned an adjusted EPS of $1.08 on adjusted sales of $847 million, up from the same period last year’s adjusted EPS of $0.78 on adjusted sales of $650 million.
Net interest income rose 73% year over year to $473 million given higher benchmark interest rates. Interactive Brokers Group, Inc. (NASDAQ:IBKR)’s adjusted pretax profit margin was 68%, up from the year ago quarter’s 65%.
13. Dollar Tree, Inc. (NASDAQ:DLTR)
Number of Hedge Fund Holders: 37
While the market has declined substantially this year, discount store Dollar Tree, Inc. (NASDAQ:DLTR)’s stock has declined only 0.78% year to date given demand doesn’t really change very much for the company in more difficult economic times. In both 2009 and 2020, Dollar Tree, Inc. (NASDAQ:DLTR) was profitable despite the recessions during those years.
Although earnings per share were lower during those years, Dollar Tree, Inc. (NASDAQ:DLTR)’s EPS bounced back shortly after when the overall economy recovered.
12. Electronic Arts Inc. (NASDAQ:EA)
Number of Hedge Fund Holders: 42
Although shares of the company are down 8.4% year to date, Electronic Arts Inc. (NASDAQ:EA) could have upside in the long term given its forward P/E ratio of 15.38 and its ability to make cutting edge video games like its Madden NFL franchise. If the Metaverse ever takes off, gaming could be a big part of the future virtual world, and Electronic Arts Inc. (NASDAQ:EA) could potentially have a lot to contribute to that sector given its skills.
If it fully captures the opportunity in augmented and virtual reality, Electronic Arts Inc. (NASDAQ:EA) could potentially increase earnings meaningfully in the future.
11. Cintas Corporation (NASDAQ:CTAS)
Number of Hedge Fund Holders: 42
Specialty business services leader Cintas Corporation (NASDAQ:CTAS) has been one of the best stocks to own in the last decade given how well its shares have done. Since 2012, the stock of the corporate identity uniform maker has increased from around $40 to $445.11 per share.
Although it’s unlikely that Cintas Corporation (NASDAQ:CTAS) can rally by that much in the next decade given its larger size, analysts still think Cintas Corporation (NASDAQ:CTAS) has more earnings growth potential in the future given their estimates that the company’s EPS will grow by an average of 12.27% a year for the next 5 years.
42 hedge funds in our database owned shares of Cintas Corporation (NASDAQ:CTAS) at the end of Q3, ranking the stock #11 on our list of 15 Best NASDAQ Stocks to Buy Now.
10. Automatic Data Processing (NASDAQ:ADP)
Number of Hedge Fund Holders: 48
Shares of staffing and employment services Automatic Data Processing (NASDAQ:ADP) have increased from around $50 per share in 2012 to $244.39 per share in 2022 thanks to strong growth. While Automatic Data Processing (NASDAQ:ADP) earned $2.82 per share in 2012, the company earned $7.00 per share in fiscal year 2022.
For the future, analysts estimate Automatic Data Processing (NASDAQ:ADP) will earn $8.11 per share in 2023, $8.99 per share in 2024, and $10.01 per share in 2025.
9. Marriott International, Inc. (NASDAQ:MAR)
Number of Hedge Fund Holders: 51
Although the stock didn’t do very well during the pandemic, premium hotel brand Marriott International, Inc. (NASDAQ:MAR) shares have nevertheless outperformed in the long term. Since 2012, the stock has more than tripled as the market has given more credit to the quality of Marriott International, Inc. (NASDAQ:MAR)’s assets and their EPS growth potential. While any future pandemic could lead to downside, Marriott International, Inc. (NASDAQ:MAR) is a high quality stock.
51 hedge funds in our database owned shares of Marriott International, Inc. (NASDAQ:MAR) at the end of the third quarter, ranking the stock #9 on our list of 15 Best NASDAQ Stocks to Buy Now.
8. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 51
While its shares have declined 28.6% year to date, ASML Holding N.V. (NASDAQ:ASML) has substantial growth potential given it has very little competition in the next five to ten years in terms of the type of semiconductor equipment it produces. Given that semiconductor equipment is arguably essential to the industry, ASML Holding N.V. (NASDAQ:ASML) has high quality earnings power and earnings growth potential in the future.
51 hedge funds in our database owned shares of ASML Holding N.V. (NASDAQ:ASML) at the end of Q3.
7. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 53
Honeywell International Inc. (NASDAQ:HON) is a specialty industrial machinery conglomerate whose shares have more than tripled from 2012. Although the pandemic and the recent market retreat has led to more volatility in the past few years, analysts still think Honeywell International Inc. (NASDAQ:HON) will continue to grow earnings per share for the future.
In terms of the consensus, analysts estimate Honeywell International Inc. (NASDAQ:HON) will earn $8.74 per share in 2022, $9.23 per share in 2023, and $10.28 per share in 2024.
6. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 54
Despite the macroeconomic headwinds, Starbucks Corporation (NASDAQ:SBUX) keeps growing. For Q4 fiscal 2022, Starbucks Corporation (NASDAQ:SBUX)’s global comparable store sales rose 7% year over year and the company opened up 763 net new stores to end the period with 35,711 stores worldwide. For full year fiscal 2022, the company’s global comparable store sales also rose 8% year over year.
Although adjusted profits for the full fiscal year declined year over year, Starbucks Corporation (NASDAQ:SBUX) could increase its EPS in the long term if it maintains its market share.
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Disclosure: None. 15 Best NASDAQ Stocks to Buy Now is originally published on Insider Monkey.
