25 Stocks to Buy for a Profitable February

Subscribers to Chart of the Week received this commentary on Sunday, February 1.

What felt like the darkest (and subsequently longest) month we’ve seen in a while is coming to a close, and there was no shortage of economic updates, geopolitical turmoil, and big-name earnings to fill it. Early in January we saw the capture of Venezuelan President Nicolás Maduro, which ended up foreshadowing what became a month of political tensions between the U.S. and several international counterparts. Most notably, U.S. President Donald Trump continued his push to acquire Greenland, though he has since abandoned tariff threats against those who oppose the sale. Investors have also digested several delayed and scheduled inflation and job reports, the latter of which pointed to a stabilizing economy.

With January now in the rearview mirror and February brewing with inflation data and other potential volatility triggers, let’s look at which stocks may be safest to invest in to keep you ahead of the curve. Senior Quantitative Analyst Rocky White pulled the 25 best stocks to buy next month, going back 10 years.

Topping the list is software name Fortinet (FTNT). An interesting stock to make the list, given its long-term underperformance since an Aug. 7 post-earnings drawdown of 22%. However, over the past week things have been looking up for the AI security systems operator.

TD Cowen triggered a 5.2% bull gap for the shares on Friday, Jan. 23, after an upgrade to "buy" from "hold," with the firm citing stable AI spending and software augmentation. In response, the equity broke above the $80 for the first time in weeks and conquered overhead pressure from the 20-day moving average, as well as a descending trendline connected to its July peak near the round $100 mark. With all three of these levels now emerging as potential support, FTNT looks ripe for a pivot higher.

Per White, Fortinet stock has finish February higher in nine of the past 10 years, averaging a return of 8.5%. From the stock’s current perch of $81.02, a lift of this magnitude would put the equity at $87.90, its highest level since that August post-earnings bear gap. This would also shave a large chunk off FTNT’s roughly 20% year-over-year deficit.

Short-term traders have preferred puts more often than calls of late. This is per FTNT's Schaeffer's put/call open interest ratio (SOIR) of 1.19 that sits in the 91st percentile of its annual range. Should this bearish sentiment begin to unwind, it could boost the shares. Plus, upgrades are overdue on the stock, with 32 of the 42 in coverage sporting a "hold" or worse rating.

All three major indexes finished Friday in the red, with the Dow Jones Industrial Average (DJI) logging a third-straight weekly loss. And although it’s not been the most positive end to the month, each of the major indexes did manage to eke out modest January wins, the Dow’s ninth straight and longest monthly win streak since January 2018. With a busy month in the books and another on the docket, we hope you take each day in stride, with an arsenal of historic and technical data to guide you through what will hopefully be a profitable February!