Best Growth Stocks to Buy Now for February 2022

The best growth stocks in this environment have low debt levels and great business models, which means they can survive rocky times. In other words, they’re the highest quality, “best in breed” names. You see this combination a lot in large-cap stocks, which have been supporting markets for a long time, but smaller stocks can check the boxes too.

See, I believe the process is more important than the stocks. The best outlier stocks (regardless of market cap) have 3 traits: strong fundamentals, great technicals, and a history of Big Money activity in the shares.

Outlier stocks see a lot of Big Money buying. Oftentimes, that can be institutional activity. At MAPsignals, we believe Big Money trading can alert you to the forward fundamental picture of a stock. And we want the odds on our side when looking for the highest quality stocks.

Focusing on quality is paramount when markets are under pressure. Using the MAPsignals database, we’ve filtered for various quality metrics to identify five ideas for potential long-term investment. Three of the names are large caps that can handle storms, while the other two are smaller, riskier stocks with big upsides: GOOGL, ADBE, MSFT, GNRC, & INMD.

Up first is Alphabet, Inc. (GOOGL), Google’s parent company.

Even though great stocks can be volatile, like GOOGL this year, these companies are worthy of attention, especially after blowout earnings and stock split announcements. Check out GOOGL:

  • 3-month performance (-9.7%)
  • Historical Big Money signals

Just to show you what our Big Money signal looks like, have a look at the top buy signals GOOGL has made the past few years in the chart below. Blue bars are showing it was likely being bought by a Big Money player according to MAPsignals.

When you see a lot of them, I call it the stairway to heaven:

Source: www.MAPsignals.com

But, what about fundamentals? As you can see, GOOGL’s sales and earnings have been strong, and its debt-to-equity ratio is low:

  • 1-year sales growth rate (+41.2%)
  • 3-year earnings growth rate (+39.9%)
  • Debt/equity (+11.3%)

Next up is Adobe Inc. (ADBE), the design software giant.

Check out these technicals for ADBE:

  • 1-month performance (-9.0%)
  • Historical Big Money signals

Let’s look long-term. These are the top buy signals Adobe has made since 2016. The Big Money love is obvious:

Source: www.MAPsignals.com

Now let’s dive deeper. As you can see, Adobe has had rock-solid growth and low debt:

  • 3-year sales growth rate (+20.8%)
  • 3-year earnings growth rate (+29.2%)
  • Debt/equity (+31.6%)

The third growth stock idea is Microsoft Corporation (MSFT), the technology giant.

Strong candidates for growth usually have Big Money buying the shares. Microsoft has that. Also, the stock has fallen recently:

  • 3-month performance (-12.4%)
  • Historical Big Money signals

Below are the Big Money signals Microsoft has made since 2010. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s look under the hood. Microsoft’s sales and earnings growth is impressive. And given its strong cloud business, software foothold, and gaming prospects, I expect more growth in the coming years:

  • 3-year sales growth rate (+15.1%)
  • 3-year earnings growth rate (+63.7%)
  • Debt/equity (+57.9%)

Number four on the list is a high-quality smaller company with a lot of promise, Generac Holdings Inc. (GNRC), which makes residential generators and other power generation equipment.

Here are the technicals important to me:

  • 1-month performance (-10.1%)
  • Historical Big Money signals

Below are the Big Money signals for GNRC since 2013:

Source: www.MAPsignals.com

Let’s examine a bit more. Generac has been growing nicely and has manageable debt:

  • 1-year sales growth rate (+12.7%)
  • 3-year earnings growth rate (+30.0%)
  • Debt/equity (+68.3%)

Our last growth candidate is an under-the-radar small cap, InMode Ltd. (INMD), which designs, makes, and sells minimally invasive and non-invasive medical products.

Check out these technicals:

  • 3-month performance (-49.7%)
  • Historical Big Money signals

InMode has lost nearly half its value recently, but believe me, it’s still a high-quality stock. It’s made the MAPsignals Top 20 report many times since it began trading in 2019:

Source: www.MAPsignals.com

Now look under the hood. InMode has been growing sales and earnings at HUGE clips for years, and its debt is almost non-existent:

  • 3-year sales growth rate (+58.4%)
  • 3-year earnings growth rate (+119.7%)
  • Debt/equity (+0.5%)

The Bottom Line

GOOGL, ADBE, MSFT, GNRC, & INMD represent top growth stocks to buy now for February 2022. Strong fundamentals and historical Big Money buy signals make these stocks worthy of extra attention for long-term investors.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in GOOGL, MSFT, and INMD in personal and managed accounts.

Investment Research Disclaimer

https://mapsignals.com/contact/

 

Big Money Dumps InMode

So, what’s Big Money? Said simply, that’s when a stock goes down in price alongside chunky volumes. It’s indicative of institutions selling the shares.

Smart money managers are always looking for the next hot stock. And InMode has many fundamental qualities that are attractive. But sometimes when values decline, money managers look to sell or may be forced to liquidate.

This downward movement creates uncertainty for the stock going forward. And as I’ll show you, the Big Money has been exiting the shares recently.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way. But Big Money sells too, especially when the situation changes.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals INMD has made the last year.

We’ve recently seen Big Money selling activity. Each red bar signals big trading volumes as the stock price dipped:

Source: www.mapsignals.com

In the last three months the stock attracted 4 Big Money sell signals. Generally speaking, recent red bars could mean more uncertainty is ahead.

Now, let’s check out technical action grabbing my attention:

Vast underperformance is an obvious red flag for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to understand the fundamental story too. As you can see, InMode has been growing sales and earnings at a double-digit rate. Take a look:

  • 3-year sales growth rate (+58.4%)
  • 3-year earnings growth rate (+119.7%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term. But when there is disagreement between the two, it could mean the situation has changed. Or it could be a huge long-term value play on a great stock.

In fact, INMD has been a top-rated stock at my research firm, MAPsignals. That means the stock has had buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis. Usually when selling dries up, great stocks rally again.

INMD has had a lot of qualities that attracted Big Money. Since it began trading in 2019, it’s made the MAPsignals top list 20 times, with its first appearance on 12/22/2020…and gaining +128.01% since.

Despite the recent decline, the fundamental story is strong. The blue bars below show the times that InMode was a top pick since 2019:

Source: www.mapsignals.com

It’s been a top stock in the health care sector according to the MAPsignals process. I wouldn’t be surprised if INMD reappears on this list in the years to come. Let’s tie this all together.

The Bottom Line

The InMode decline makes the stock look oversold. Big Money selling in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be a huge value play long-term and still worth a spot in a growth-oriented portfolio.

Disclosure: the author holds long positions in INMD in personal and managed accounts at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

https://mapsignals.com/contact/