If you're hungry for steak, sometimes you have to settle for a burger at the drive-thru. But there's no reason to settle for less when it comes to investing; you should look for the best of the best. Investors.com has the tools necessary to help you find the leading stocks in the leading industries.
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Because the leading stocks tend to maintain their high performance, identifying those leaders is imperative. Historically, winning stocks are found in the top 40 of 197 IBD industry groups.
Therefore, IBD's industry group ranking is one of the best places to start to identify leadership. This table is updated each day and color-coded to make tracking the leading industry groups easy.
MarketSmith includes the 197 industry groups as well. Look for "Markets/197 Industry Groups." Once you open a group's chart, click on the "Related Information" tab on the right margin to see each stock in the group.
If you already have a stock in mind, IBD's Stock Checkup will show you how it ranks within its industry.
You can view rankings by a number of IBD's tools. The Relative Strength Rating measures a stock's 12-month price performance versus all other stocks in our database. IBD's research shows that winning stocks had an average rating of 87 before a major run. An industry-leading stock will generally have a rating between 80 and 99.
The Composite Rating combines the RS Rating with other IBD ratings such as the EPS Rating and Accumulation/Distribution Rating. This provides a broader understanding of leadership.
The Artificial Intelligence Boom
The biggest theme of 2023 was AI and it continues into this year. In every earnings report, companies made sure to let us know how they were incorporating AI.
Nvidia (NVDA) rose a monstrous 238% in 2023. But if you take off your rose-colored glasses, its success was not a guarantee. Nvidia did not have a positive earnings report until August, and if you missed the breakout Jan. 8, shares were extended in a couple of days.
In late March 2023, semiconductor designers were the No. 2 industry. While Nvidia was nearly 20% above the 50-day line, Rambus (RMBS) was setting up in base. A Composite Rating of 98 and an RS rating of 97 were bullish. Earnings were strong and projected to come in at 39% above the year before. Also important: The industry group was in the top 40 rankings.
On March 29, Rambus cleared a flat base buy point of 46.16 with more than double the average daily volume (1). Shares faltered mid-April but did not trigger the 7% stop loss rule (2).
Those who held through the earnings report and a subsequent cup base saw gains up to 48% before the peak in June (3).
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