Three High-Conviction Stocks on My Watchlist for 2026

As we navigate the early months of 2026, the stock market continues to trade near all-time highs. While valuations have stretched in many sectors, this elevated backdrop doesn’t eliminate the opportunity to identify compelling companies at reasonable entry points. My watchlist currently features three businesses that I believe offer attractive risk-reward dynamics as the year progresses.

Finding Value in an Elevated Market

The challenge for most investors today isn’t identifying solid companies—it’s finding those trading at prices that reward patient capital. The key is recognizing that market momentum and valuation disconnects often create windows for strategic entry. Rather than chasing yesterday’s winners, I’ve been focusing my research on identifying companies with genuine competitive advantages and strong fundamentals trading on my watchlist.

The morning prices on January 9, 2026 provided a useful snapshot of where several candidates stood. By the time the analysis was published on January 10, market sentiment had shifted slightly, but the core thesis for each position remained intact. This illustrates an important principle: short-term price movements shouldn’t distract from the longer-term investment case.

Past Performance Shows the Potential of Conviction Picks

When our research team identifies what we call “high-conviction opportunities,” we often reference historical precedent. The data tells a compelling story about the long-term power of conviction investing:

• Nvidia: An investor with $1,000 deployed when we issued a conviction recommendation in 2009 would have accumulated $479,611 by January 2026—a powerful reminder of compounding’s potential.
• Apple: The same $1,000 investment made during our conviction call in 2008 would have grown to $49,510, demonstrating how Apple’s ecosystem dominance translated to shareholder returns.
• Netflix: Those who trusted our conviction pick in 2004 and invested $1,000 saw that position grow to $482,209—a testament to Netflix’s disruptive impact on entertainment.

These aren’t anomalies; they represent the kinds of returns possible when conviction aligns with company quality. The question for 2026 isn’t whether such opportunities exist—it’s whether we can identify them before the market fully recognizes them.

The Case for Adding These Three Names to Your Watchlist

My current research has led to three specific companies I’m monitoring closely: selections that reflect a mix of growth potential and valuation discipline. Without overstating the opportunity, I believe these represent the type of quality that has historically rewarded patient shareholders.

The analytical framework behind these selections draws on The Motley Fool’s research capabilities and the conviction-based methodology that has guided previous successful recommendations. Each company on my watchlist has been vetted against rigorous standards for competitive positioning, management quality, and financial health.

Moving Forward

Market timing remains notoriously difficult, and perfection in stock selection is impossible. However, strategic conviction—backed by rigorous analysis—has historically provided an effective framework for long-term wealth creation. As 2026 unfolds, these three names merit serious consideration for growth-oriented portfolios.

Disclosure: Matt Frankel, CFP holds no positions in the stocks mentioned above. The Motley Fool maintains positions in and recommends Etsy, Trex, and Unity Software. Those considering these investments should review The Motley Fool’s full disclosure policy. Returns referenced represent Stock Advisor performance through January 13, 2026. This analysis is based on historical data and does not guarantee future results. Views expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.