If you’re going to invest, you need to buy the best stocks at the right time and know when you see a bargain price that will help you beat the market. For my money, that means looking for A-rated stocks to buy.
A stock gets its well-deserved “A” rating in the Portfolio Grader when it’s at the top of the class. The Portfolio Grader evaluates stocks based on things like earnings performance, growth, analyst sentiment and buying momentum.
It’s not easy for a stock to get an “A” grade, but I’ve come to believe that it’s a valuable method for evaluating stocks relatively quickly and forecasting which are doing the best job of providing investors outstanding returns.
I recommend choosing A-rated stocks to buy in a variety of sectors. It’s a good way to diversify your portfolio rather than letting yourself get too heavily tilted to technology, automotive, or other popular sectors.
This list has a variety of sectors for A-rated stocks to buy in February. According to the Portfolio Grader, this is a solid way to stack your portfolio.
Abercrombie & Fitch (ANF)
I get it. A retail stock probably isn’t your first choice when you think about A-rated stocks to buy. But Abercrombie & Fitch (NYSE:ANF) defies expectations that have been plaguing the retail sector.
The company, which is best known for its brands Abercrombie, Hollister and Gilly Hicks, has over 750 stores in the U.S., Europe, Asia and the Middle East. It has avoided the supply chain issues, inflation woes and lowered profit margins that sent other retailers into a downturn.
The company saw strong sales across the board in the third quarter, with Americas sales up 22% to $867 million; sales in Europe, the Middle East and Africa up 14% to $157.9 million; and sales in the Asia-Pacific region up 13% to $30.8 million.
Overall, ANF saw third-quarter sales of $1.1 billion, up 20% from a year ago. Abercrombie is reporting full-year and fourth quarter numbers next month, when it’s expected to post sales growth of 12% to 14% and an operating margin of roughly 10%.
ANF stock is up 276% in the last year and gets an “A” rating in the Portfolio Grader.
Sprouts Farmers Market (SFM)
Sprouts Farmers Market (NASDAQ:SFM) is another retail stock, but this one is in the grocery arena. Grocery stocks are usually pretty solid choices, even in inflationary times, because you know sales will continue.
Sprouts, however, operates in a niche by focusing on natural and organic products rather than processed and packaged foods. It has over 400 stores in 23 U.S. states, with plans to open at least 10 new stores a year.
Earnings in the third quarter came to $1.7 billion in revenue, with comparable store sales up 3.9% from a year ago. Sprouts also repurchased 831,000 shares at a price of $32 million, which helped drive the stock price higher.
Sprouts will report full-year earnings on Feb. 22, and I’m expecting another solid quarter. SFM stock is up 59% in the last year and gets an “A” rating in the Portfolio Grader.
SkyWest (SKYW)
SkyWest (NASDAQ:SKYW) is a Utah-based regional airline that operates a fleet of almost 500 aircraft. SkyWest serves 247 locations in North America thanks to its partnerships with major air carriers.
Those fee-for-service partnerships with United Airlines (NYSE:UAL) and Delta Air Lines (NYSE:DAL), among others, are important because they help give SkyWest a consistent income stream.
Revenue for the fourth quarter of 2023 was $752 million, up 10% from a year ago. SkyWest posted net income of $18 million, or 42 cents per share for the quarter.
And it repurchased 1 million shares of stock at a price of $45 million in the quarter, adding to its 10.6 million shares repurchased in 2023.
SKYW stock is up 188% in the last year and gets an “A” rating in the Portfolio Grader.
NRG Energy (NRG)
NRG Energy (NYSE:NRG) is a Houston-based energy company that provides electricity and natural gas to 7.6 million residential and commercial customers.
The company generates 13 gigawatts of electricity, with most of that happening in Texas. Its brands include Reliant, Vivint, Direct Energy, Green Mountain Energy, Discount Power and more.
Earnings for the third quarter were strong – NRG reported revenue of $7.9 billion, which was down from $8.5 billion a year ago. But the company’s operating income was much improved, coming in at $561 million versus $156 million in the same quarter a year ago.
The company raised its Q4 2023 guidance from a range of $3.01 billion to $3.25 billion in adjusted EBITDA to a range of $3.15 billion to $3.3 billion.
For the full year 2024, NRG is projecting adjusted EBITDA in a range of $3.3 billion and $3.5 billion.
NRG also gives you the benefit of a dividend, with a yield of 3.1%. The stock is up 47% in the last year and gets an “A” rating in the Portfolio Grader.
Dell Technologies (DELL)
Dell Technologies (NYSE:DELL) is a blue-chip computer company that makes laptops, desktop computers, mobile devices and notebooks. In a crowded field, Dell has roughly 8.5% of the market share, placing it in third place among the competition.
But this old dog is learning a new trick. The company’s stock has been higher in the last year as investors are buying into Dell’s artificial intelligence plans. It operates a generative AI platform that helps its customers generate better predictions and analyze data.
Thanks to consumer interest in generative AI, Dell saw 9% growth in its server and networking revenue in the third quarter of fiscal 2024. Company officials say they expect that trend to continue into the next fiscal year.
Overall earnings for the quarter included revenue of $22.2 billion, down 10% from a year ago. But net income was $1 billion and $1.36 per share, much better than a year ago when the company brought in $241 million and 33 cents per share.
DELL stock is up 96% in the last year and also shows a dividend yield of 1.8%. It gets an “A” rating in the Portfolio Grader.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) is playing catch-up in the generative AI game. But that’s OK. Even though Nvidia (NASDAQ:NVDA) leapt to the forefront of generative AI and holds a lion’s share of the market, AMD is in a good place right now.
AMD’s MI300 AI processors, which are set to compete directly with Nvidia, look to bring in big profits for AMD this year. The company increased its full-year processor revenue projections for 2024 from $2 billion to $3.5 billion. And interestingly, analysts like CFRA Research’s Angel Zino say that AMD is still likely being conservative with that estimate.
Revenue for the fourth quarter of 2023 was $6.1 billion, up 10% from a year ago. Net income of $667 million was a vast improvement from $21 million in the same quarter last year.
For the full year, AMD reported revenue of $22.6 billion, down 4% from 2022. But now that the MI300 processors are in play, AMD should have a solid 2024 and will turn those full-year numbers around.
AMD stock is up 101% in the last year and gets an “A” rating in the Portfolio Grader.
Uber Technologies (UBER)
Uber Technologies (NYSE:UBER) is on a hot streak. The ridesharing company recently posted its first annual profit. It announced a $7 billion stock buyback plan. And the stock appears poised for good things in 2024.
Uber has been a transformative company, disrupting the taxi industry and expanding into food delivery with its Uber Eats app. It also joined the S&P 500 in December, which further added to the demand for UBER stock.
But if you are a shareholder, you’re most excited about the idea that Uber is finally poised to turn a consistent profit. Its gross bookings jumped by 22% in the fourth quarter, and revenue was up 15% to $9.9 billion.
For the first quarter of 2024, Uber is projecting gross bookings of $37 billion to $38.5 billion, and adjusted EBITDA of $1.26 billion to $1.34 billion.
UBER stock is up 118% in the last year, and it gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in ANF and NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in NVDA. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.