Wall Street is increasingly focused on the short term, obsessing over smaller and smaller time frames. That game’s for the birds. The best stocks to buy for August look attractive for the next 30 days — and far beyond, into the long term.
Hailing from a number of different sectors, this mixture of five stocks also includes a range of market capitalizations and dividend yields, giving a nice property of diversification that most investors should appreciate.
[See: The 10 Most Valuable Tech Companies in the World.]
So, forget the day trading and minute-by-minute analysis of the chart squiggles. Let that be the purview of the Gekko wannabes. Work on building yourself a portfolio that can go to work for you over the next number of years.
Here are five of the best stocks to buy for August — all of which hold long-term promise as well.
Celgene Corp. (Nasdaq: CELG)
A $63 billion biotech leader, Celgene hasn’t exactly been a market leader of recent. In fact, it’s down about 35 percent in the last year.
This unpopularity seems to have peaked however, and CELG has nice momentum, up 19 percent from its 52-week lows in May. So the reasons Celgene happens to be one of the best stocks to buy for August are twofold: 1) The market is starting to appreciate the stock again, 2) The stock is criminally undervalued.
Consider that this company is trading at 16 times earnings and 8 times forward earnings. After some regulatory setbacks, the company scored positive trial results for luspatercept, a drug for myelodysplastic syndromes (MDS), which could deliver $2 billion in peak annual sales.
Those good results have attracted money to CELG, which even before the good news was expected to grow earnings by 14 percent in 2018 and 20 percent in 2019.
Anthem (ANTM)
If you’re worried about the bad juju that a beaten-down stock like Celgene might have, you’ll get a fuzzy feeling looking at the price history of ANTM.
Another $63 billion company in the health game, Anthem offers health care coverage.
Fresh off its second-quarter earnings report, Anthem beat profit estimates, raised its full-year earnings per share forecast, and by cutting costs was able to improve its expense ratio dramatically. ANTM announced that it spends 83.4 percent of its premiums on costs, down from 86.1 percent a year ago.
The reaction to the good quarter was muted, which makes shares look even more reasonable. At 14 times forward earnings and paying a 1.2 percent dividend, Anthem has earned its label as one of the best stocks to buy for August.
Intel Corp. (INTC)
The last of the blue-chip stocks on this list, Intel is one of the leading chipmakers in the world and has been for decades.
Not only do its products famously go in PCs, but it’s done a nice job of expanding its products for a mobile-heavy world. Still, those areas in total are expected to rise only modestly going forward, growing revenue by somewhere in the single-digits.
[See: 52 Elite Dividend Stocks With Unreal Track Records.]
Intel’s real growth has come from its data center group, where revenue has recently been growing more than 20 percent annually. And in the future, its acquisition of autonomous driving company Mobileye is extremely promising given the secular growth there.
INTC is also going after Nvidia Corp. ( NVDA), recently announcing that it will release its own graphics processing unit (GPU) chip in 2020, which signals more growth avenues in areas like gaming and data centers that support streaming video.
INTC, a veritable cash cow, also pays a sustainable 2.3 percent dividend, the highest on this list.
First Financial Northwest Inc. (FFNW)
About 1,000 times smaller than Intel, FFNW is a Washington-based small-cap regional bank worth about $221 million.
The best stocks to buy for August (and beyond) clearly come in all shapes and sizes.
There are several reasons First Financial Northwest looks like an attractive investment. First, tax reform is a great boon to the company: earnings per share literally tripled in the first quarter. This isn’t a sustainable result, but FFNW at 15 times earnings is quite reasonably priced.
Investors will also be pleased to know that the Northwestern bank is under impressive management; CEO Joseph Kiley has been in place since 2012, and an enviable rally in the stock has accompanied his tenure.
At 1.35 times book, with a rising-rate environment that will serve as a rising tide, and with a modest 1.6 percent dividend, FFNW is an unexpected but deserving member of this month’s list.
Universal Insurance Holdings (UVE)
Last but not least is a little stock called UVE, a property and casualty insurer based in Florida. At a $1.2 billion valuation and residing in a fairly “boring” industry, this stock has been routinely overlooked and undervalued by the market.
UVE has literally one analyst covering it. This is precisely the sort of place where great market-beating gains can be unleashed if you look carefully.
Recently, Mr. Market has begun perking up to UVE’s reliability and low valuation. Shares are up about 60 percent in the last year, including a roughly 9 percent gain on July 26 after the company announced impressive second-quarter earnings.
[See: 7 of the Best Stocks to Buy for 2018.]
Even after these gains, UVE stock trades for just 11 times earnings and 6.7 times free cash flow. It also pays a 1.7 percent dividend.
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5 of the Best Stocks to Buy for August originally appeared on usnews.com
