19 Best Stocks to Buy Now for High Upside Potential

Finding the best stocks to buy when the market is selling off can be daunting, but the pros believe these 19 top-rated names are poised for big returns.

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(Image credit: Getty Images)

If the goal is to find stocks to buy when prices are lower rather than higher, it stands to reason that the time to go looking for the best stocks to buy is right now.

After all, the market is off by more than a fifth so far this year, which means it's probably safe to assume that most investors are fearful. And if most investors are fearful, well… doesn't Warren Buffett say that this is the time to get at least a little bit greedy?

Finding quality stocks to buy when seemingly everything is selling off is easier said than done, of course. And if you're looking for help from Wall Street analysts, good luck. There's a saying about analysts: "In a bull market you don't need them; in a bear market you don't want them."

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That's far too harsh as an assessment – but understandable as a sentiment. It's well known that Wall Street analysts are reluctant to slap Sell calls on the stocks they cover. There are a number of reasons for this reticence, but that's a discussion for another day.

Perhaps less well known is that analysts are also pretty stingy when it comes to bestowing the highest conviction Buy recommendations on the names they follow.

As of Sept. 22, only five stocks in the S&P 500 carried consensus recommendations of Sell or Strong Sell, according to data from S&P Global Market Intelligence. At the other end of the ratings spectrum, 392 of the index's 500 stocks had consensus recommendations of Buy or Strong Buy.

That's far too many Buy calls, to be sure. We know for a fact that the vast majority of stocks turn out to be duds. Research (opens in new tab) shows that the entirety of the $75.7 trillion in net global stock market wealth created between 1990 and 2020 was generated solely by the top-performing 2.4% of stocks.

To be fair, when analysts issue Buy recommendations, all they're saying is that they expect the stock in question to outperform the broader market by some margin, or deliver, say, a 15% total return, over the next 12 months or so. Every research shop has different definitions and metrics, but analysts are not making 30-year calls.

And yet, consensus Buy calls are so abundant that it's only natural to be at least somewhat skeptical of their value.

Happily, there is a subset of consensus Buy calls that are not so freely dispensed. Within the Street's decidedly overoptimistic universe of 392 consensus Buy-rated stocks, only 24 – or 4.8% of all the names in the S&P 500 – get a consensus recommendation of Strong Buy.

True, Strong Buy calls are nowhere near as rare as Sell or Strong Sell calls. But they are special nonetheless. Perhaps – just perhaps – analysts are on to something when they collectively possess such high conviction on a name?

With that as our admittedly hopeful hypothesis, we used S&P Global Market Intelligence data to screen the S&P 500 for stocks with Strong Buy consensus recommendations and implied upside of at least 20% in the next 12 months or so, based on share prices and analysts' average price targets as of Sept. 21.

Have a look at the table below and you'll see that only 19 stocks made the cut.

Prominent names include beaten-down mega-cap stocks such as Microsoft (MSFT (opens in new tab)), Amazon.com (AMZN (opens in new tab)) and Google parent Alphabet (GOOGL (opens in new tab)). Real estate investment trusts (REITs) HCA Healthcare (HCA (opens in new tab)) and Alexandria Real Estate Equities (ARE (opens in new tab)) also make appearances. You will likewise see representatives from the financial, energy and industrial sectors, to name just a few.

But all these stocks do have at least three things in common: They are in the S&P 500, they sport Strong Buy consensus recommendations from Wall Street industry analysts, and their average price targets give them implied upside of anywhere from 20% to nearly 90% in the not-too-distant future.

table of S&P 500 stocks with strong buy ratings and Implied upside of 20% to 88% in the next 12 months

(Image credit: Kiplinger, S&P Global Market Intelligence)
Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.