Today I am going to analyze the 50 best stocks according to Investor’s Business Daily.
I remember how influential this list of stocks was when I first started trading. In the beginning I almost exclusively traded IBD 50 stocks, but quickly found out it was no holy grail of stocks. If you blindly trade this list, you could lose a lot of money.
However, it is a good starting point and if you are in a pinch, it’s a decent list.
The IBD 50 ETF
To analyze the IBD 50, I am using the “Innovator IBD 50 ETF Fund”. It is an ETF that “seeks to track the results of the IBD 50”.
It tracks the 50 IBD stocks and rebalances weekly to stay up to date with the list.
Investors Business Daily created the IBD 50 to target companies that generate outstanding profit growth, big sales increases, wide profit margins and a high return on equity.
Notice in this comparison with the S&P500 and Nasdaq, it is lagging the major indexes. Both the Nasdaq and SPY are crushing FFTY (The IBD 50 ETF) over the past 3 months.
In fact, over the last year the IBD is actually down, while the S&P 500 is up 2%. While this is proof that this list does not beat the major indexes, it does not mean there aren’t great stocks in the list that we can’t use to profit and beat the market.
However, it does mean we have to execute in depth analysis according to our market winning trading strategies.
Analyzing the IBD 50
Now let’s break the IBD 50 down. In this video, I am going to analyze all of the IBD 50 stocks and pick the best of the best. I analyze the stocks based on the following factors:
- Price action and potential setups
- Volume patterns
- Relative strength
Here is the video. After watching, we’ll narrow the list even further.
The 10 Best IBD Stocks
Now that we’ve narrowed the best of the 50 stocks, here are the 10 that made it to my own Focus List. We can call the the BOW IBD 10.
Keep in mind we are not saying these are at buy points or good entry levels. This is a list of the best stocks to potentially trade. I’ll be watching these stocks over the next few weeks for setups and entry good points.