Many people are looking for stocks to buy, driven by just one thing: fear. Whether it is the fear of losing it all or the fear of missing out (FOMO), investors tend to run in packs. That is why it pays to be contrarian. Zig when the market zags, or as Warren Buffett says, be fearful when others are greedy, and greedy when others are fearful.
Doing the opposite of what everyone else is doing is how you can handsomely profit from the “wisdom” of crowds.
So where are we now? The Chicago Board of Options (CBOE) oversees the Volatility Index, commonly called the VIX. It measures the volatility investors expect in the stock market. The lower the index, the more bullish investors are. The higher, the more fearful they tend to be.
Right now, the VIX sits right around 13, which suggests bullishness (between 0 and 15 is a bullish sentiment). Arguably, direction is more important than location. Which way the index is heading can reveal more about investor mindset than where it is at any given moment. Today, the VIX is falling.
In mid-April, the index was just below 20, which generally means normal market conditions. However, just as the pandemic struck in March 2020, the VIX soared at an all-time high 82.69.
According to the VIX, retail investor enthusiasm remains upbeat today. Other indices, such as the CNN Business Fear and Greed Index, suggest fear is driving the market to new highs.
This seems to be two sides of the same coin. As the stock market goes higher, FOMO is kicking in. Investors can use that to their advantage. Below are three stocks to buy that are poised to surge from the crowd wanting in.
Stocks to Buy: Viking Therapeutics (VKTX)
Considering Viking Therapeutics (NASDAQ:VKTX) has already tripled in value in 2024, getting in now might seem like I’m encouraging investors to do what I just warned about—getting onboard late after all the profits were made. However, the biotech stock still has more gas left in the engine to power further gains.
Much of its growth is already related to its weight-loss therapy in clinical trials. VK2735 reported positive Phase 2 trial results earlier this year, and because it is an oral treatment rather than an injection like Ozempic from Novo Nordisk (NYSE:NVO) or Zepbound from Eli Lilly (NYSE:LLY), the market opportunity is much larger.
If that was all Viking had going for it, I wouldn’t recommend it. However, the biotech just reported positive results from its “best-in-class” therapy, VK2809, for liver disease. The treatment seems to stop the additional fibrosis formation due to the fatty tissue buildup in the liver. Left untreated, it can lead to cirrhosis. Viking previously reported that VK2809 led to significant reductions in liver fatty tissue.
Viking Therapeutics stock is down 43% from its 52-week high. Yet, with even more therapies in its portfolio and positive developments on its lead candidates, VKTX stock looks ready to surge.
McDonald’s (MCD)
It’s not quite as exciting as the biotech world, but McDonald’s (NYSE:MCD) recent introduction of a new $5 value meal could be just as important to the fast-food joint. Consumers have been walloped by a lack of job growth, anemic wage gains, and high inflation and interest rates. They have reeled in spending on most goods beyond necessities.
McDonald’s used to be a place families could go to get a cheap, tasty meal quickly, but the burger shop’s lack of value in its meal selection kept many away. The restaurant chain warned earlier this year that growth would moderate in 2024, and in its first-quarter earnings report, we saw that happen. Global comparable sales fell for the fourth consecutive quarter, and it missed profit projections for the first time in two years.
That’s why the new value meal offering is important. This shows that McDonald’s again focuses on its core customers and their need for low-cost food options. That could spark a turnaround in its stock, currently down 12% year-to-date. Shares are near their 52-week low and is one of the best stocks to buy before they begin a new run higher.
Crowdstrike Holdings (CRWD)
Like Viking Therapeutics, buying cybersecurity leader Crowdstrike Holdings (NASDAQ:CRWD) now is like closing the barn door after the horse ran off. The stock just reported earnings that have the stock popping 12% on the news. And that’s after shares were already up 28% this year and had doubled over the past 12 months.
Yes, maybe it would have been better to buy the stock yesterday or last year when I identified Crowdstrike as a “strong buy” in cybersecurity, but there is plenty of profit opportunity left. The threat of hackers and cybercrime has never been bigger. LexisNexis Risk Solutions says “human-initiated digital attacks” are up 19% globally from last year.
That explains why Crowdstrike’s revenue jumped 33% year-over-year while it produced 17 cents per share in profits this quarter versus break-even last year. Net new average recurring revenue also grew 22% for the year-ago period to $212 million, with a record free cash flow of $322 million.
Crowdstrike’s business remains hot, and there seems to be no let-up in how high it can soar. Definitely one of the best stocks to buy!
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
