Some traders ascribe a mythical level of power to the ninth month of the year. Usually, traders assert, it’s a bad one. Despite the ominous cloud of fear, uncertainty and doubt lingering over September, U.S. News & World Report has set out to find five of the best stocks to buy right now.
[See: 7 Stocks That Soar in a Recession.]
Superstitions aside, August was a propitious month for investors, giving markets good momentum heading into fall. Stocks hit all-time highs, with the Nasdaq composite breaking through the 8,000 level for the first time.
While it’s almost certainly not a good idea to trade in and out of stocks from month to month — trading costs and emotionally based timing errors tend to destroy returns — there are always attractive deals out there. Here’s a look at five of the best stocks to buy for September.
Apple Inc.
You may have heard tell of this business. After an impressive July 31 earnings report, Apple (Nasdaq: AAPL) became the first $1 trillion company on the planet. In the short span of time since then, Apple has added another $55 billion in market value.
Despite those dizzying records, AAPL is still one of the best stocks to buy now.
Why? Well, September certainly isn’t a bad month in Cupertino. September is that time of year when media, consumers, tech nerds and investors alike all focus their attention on Apple, where the next line of iPhones is unveiled.
The latest from the rumor mill is that Apple will break from tradition for the second consecutive year and release three new iPhone models. Instead of shimmying down the price totem pole to seize more market share with a lower-priced model, the idea is likely the opposite: improved features, larger screens, and higher prices.
All three models are expected to feature edge-to-edge displays, and each will be bigger than last year’s predecessor, with the largest 6.5-inch iPhone possibly retailing for as much as $1,200.
That, dear reader, is how you get to $1 trillion.
Ryanair Holdings
While Ryanair Holdings ( RYAAY) couldn’t be more strategically different from Apple, both make the cut as five of the best stocks to buy now. A European budget airline whose business model is all about low costs and expanding the size of its market, Ryanair has used its low-cost structure to bully its rivals into becoming Europe’s top carrier by traffic — and it’s still growing.
Unfortunately, RYAAY shares have struggled in 2018 despite Ryanair’s popularity among backpackers on a budget and the business’ enviable competitive advantage.
Its next closest competitor by price is Wizz, with fares 24 percent higher than Ryanair’s. This gap will remain large as long as RYAAY’s cost advantage is around, and indeed that cost advantage expanded last quarter. The only thing holding back shares has been a large strike at the hands of Irish pilots, which in the last week of August was negotiated to an end.
[See: 9 Best Cheap Stocks to Buy Now Under $5.]
At 15 times earnings and a price-earnings-growth ratio of just 0.63, Ryanair is cheap as a service — and as a stock.
Spotify Technology SA
Probably the highest risk of the stocks on September’s buy list, the music streaming giant Spotify ( SPOT), which only recently went public earlier this year, has done well since its IPO, with shares up about 30 percent.
Unlike other millennial-associated subscription services like Snapchat ( SNAP) and Facebook ( FB), Spotify is currently growing its monthly active users (MAUs) at an admirable 30 percent clip. In contrast, Snapchat saw its daily active users actually fall last quarter, and Facebook spooked investors with decelerating user growth in its own Q2 report.
Spotify, meanwhile, saw MAUs grow to 180 million last quarter, and premium subscribers grow by 40 percent. Premium is where the money is, and though Spotify isn’t profitable yet, the profits will eventually come if it can keep up this rapid growth.
In the meantime, expect SPOT stock to remain volatile, so don’t go putting all your retirement savings in this basket.
Oasis Midstream Partners
The ancient Greeks believed that “all things in moderation” was the best way to live life. It also happens to be the best way to construct a well-diversified portfolio: a little growth here, a little value there, a small-cap here, a mega-cap there, and so on.
Oasis Midstream Partners ( OMP) is one of the best stocks to buy for September in its own right, but the fact that the $630 million Houston-based master limited partnership pays unitholders a hefty 7 percent annual dividend doesn’t hurt, either.
Plus, it provides a nice counterweight for the small amount of dividend income offered by the other four September picks.
Last December, U.S. News named OMP one of the best dividend stocks to buy for 2018, and it’s more than lived up to the hype, up a dividend-adjusted 38 percent year-to-date through the end of August.
OMP, a midstream oil and natural gas company, still has room to run in the years ahead as management aims to grow its distribution by 20 percent annually.
Celgene Corporation
Last but not least, biotech giant Celgene ( CELG) goes down as one of the best stocks to buy now for the second consecutive month.
When highlighting CELG as a top stock pick in August, U.S. News noted that Celgene shares had seemingly reached their short-term low, and the stock was rebounding nicely. That observation proved true, with CELG adding another 3.7 percent in August alone.
Despite this solid performance, Celgene still remains a steal for investors looking to gain access to the booming healthcare sector and high-opportunity gene-editing market, where Celgene has focused its attention and nurtured partnerships.
[See: Artificial Intelligence Stocks: The 10 Best AI Companies.]
Trading at just 8.6 times forward earnings and a price-earnings-growth ratio of 0.88, shares of the $64 billion Summit, New Jersey-based biotech leader are still 37 percent below their 52-week high, leaving plenty of upside as Wall Street continues to come back around to CELG.
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5 of the Best Stocks to Buy for September originally appeared on usnews.com
