10 Stocks to Buy in July

As my title suggests, I'm going to name 10 stocks that you can buy right now in July. These stocks are all cheap given their future prospects. I own many of them in my personal holdings and am seriously considering the rest. After I fill you in on the 10 stocks, keep reading below and I'll reveal which ones I'm most bullish on at today's prices.

1 tech blue chip on sale
When a company sells for as cheap as Microsoft (Nasdaq: MSFT  ) is trading (single-digit price multiples after backing out cash), something tangible is usually amiss.

With Microsoft, it's less that something's wrong and more that something could go wrong. Mr. Softy has a lot going on, and we could certainly take potshots at the areas it doesn't dominate, such as Web search and smartphones. But let's remember where Microsoft's bread is buttered: Microsoft Windows and Office. There are certainly threats there, too, but again, it's trading pretty cheaply for just "could go wrong."

1 little company with a massive, hidden dividend
Back in May, I wrote about mini-conglomerate National Presto (NYSE: NPK  ) , "the little company with a massive, hidden dividend." Because of its recent practice of paying a small regular dividend and a large special dividend, sites like Yahoo! Finance assign National Presto a 1% dividend yield. But its actual trailing yield is 8%!

National Presto's trading a bit cheaper than it was in May, so it's a good time to check the company out.

2 retailers that are bigger than Amazon
With so much press around commerce moving from bricks-and-mortar stores to the Internet, it's easy to forget that Target (NYSE: TGT  ) and Best Buy (NYSE: BBY  ) both still have significantly more sales than Amazon.com. But while Amazon.com's stock is blazing new all-time highs, Target and Best Buy shares are in the discount aisle.

Of course, they can't compete with the explosive growth of Amazon. But over the past five years, Target has grown sales by almost 5% a year, Best Buy by almost 10%. Of the two, I'm more confident of Target's future growth prospects, but Best Buy has the better balance sheet and is discounted more.

4 tight-lending banks
Below are four banks (three small U.S. banks and one large Canadian bank) that show good lending practices (a bad loan percentage of 1% or below). Although three trade at lofty price-to-tangible book values, all have been able to crank out enough earnings to present P/E ratios between 11 and 13. They also pay out pretty good dividends, ranging from 2.8% to 4.5%.

There are still problems that could occur both with the loan portfolios and outside of lending activity. For example, Canadian Imperial Bank of Commerce took a hefty trading loss back in fiscal 2008. Still, at today's prices, I'd bet on this group to beat the market from here.  

Bank Name

Market Cap (in millions)

Bad loan %

Price-to-tangible-book value

P/E

Bank of Hawaii

$2,206

0.7%

2.29

12.9

Financial Institutions

$240

0.5%

1.41

11.3

Community Bank System

$919

0.6%

2.67

12.8

Canadian Imperial Bank of Commerce (NYSE: CM  )

$30,022

1.0%

2.77

12.1

Source: Capital IQ, a division of Standard & Poor's.

1 back-from-the-dead company
Even with government aid, General Motors (NYSE: GM  ) was such a mess that it had to declare bankruptcy in 2009. Now that it's back, it's gotten a once-bitten-twice-shy reception from the investing community as shares trade below its $33 IPO price.

Some things are the still the same: GM still operates in a capital-intensive industry against a host of global competition. What's different is that GM's streamlined, both in terms of costs and product lines (goodbye Pontiac, Saturn, Oldsmobile, and Hummer). Its balance sheet is pretty strong with a net cash position and manageable pension obligations. And not only is it currently profitable, it has tax loss carryforwards that survived bankruptcy. The upshot? In the last 12 months, GM has had an effective tax rate of 3.3%.

1 generic pick
Eli Lilly
, Pfizer, Merck, and Teva Pharmaceuticals (Nasdaq: TEVA  ) all trade at similar forward P/E ratios in the range of 8-10. The first three are discounted because investors worry that Big Pharma's drug pipelines won't be able to replenish sales lost to expiring blockbuster patents. What's interesting about Teva is that it is primarily a generic-drug maker that benefits from patent expirations. Seems like a disparity worth exploring to me.

The stocks I'm most bullish on
Each of the 10 stocks above are worthy of your consideration. All are priced to beat the market from here. But if you forced me to pick the ones I think offer the best risk/reward today, I'd pick Teva, GM, Best Buy, Microsoft, and National Presto (in no particular order). I hope these ideas serve you well. If you're hankering for one more stock idea, check out our free report: The Only Energy Stock You'll Ever Need. Just click here to access it immediately.

Anand Chokkavelu owns shares of Best Buy, Microsoft, National Presto, GM, Pfizer, and Community Bank System. The Motley Fool owns shares of Microsoft, Best Buy, National Presto, and Teva Pharmaceutical. Motley Fool newsletter services have recommended buying shares of Amazon.com, Microsoft, General Motors, Best Buy, Pfizer, and Teva Pharmaceutical, and creating a diagonal call position in Microsoft. Motley Fool newsletter services formerly recommended Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (43) | Recommend This Article (120)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 11, 2011, at 5:42 PM, xetn wrote:

    As everyone knows, people have very different views on what types of stocks will occupy their portfolios. For example, many people will not invest in tobacco companies because they are against the use of the "drug". A few years ago, many people would not invest in South Africa because of its political policies.

    As for me, I won't invest in "Government Motors", or any other bailout company. They all should have gone the way of their predecessors: bankruptcy.

    (Unfortunately, I am supporting some of them through my banking (either they were taken over, received bailout money or were the recipient of a takeover.) <sigh>

  • Report this Comment On July 11, 2011, at 5:44 PM, NovaB wrote:

    I'm not buying a darned thing until we find out if the GOPers are really willing to throw our whole society under the bus for their twisted and previously-failed ideology.

    Dollars may not be worth anything in a month, either.

  • Report this Comment On July 11, 2011, at 5:55 PM, Fordstito wrote:

    "formerly recommended Best Buy" and then recommended selling it at a lower price than it has now, and dropped it from the Stock Advisor boards.

    I get the Fools agreeing to disagree thing, but come on, this is a bit much. is Best Buy eponymous? or what?

  • Report this Comment On July 11, 2011, at 6:06 PM, itsmybelief wrote:

    I'm not buying a darned thing until we find out if the DEMers are really willing to throw our whole society under the bus for their twisted and previously-failed ideology.

    Dollars may not be worth anything in a month, either.

  • Report this Comment On July 11, 2011, at 6:11 PM, bretco wrote:

    re; Fordstito, eponymous, or what,

    It is reaching a point where at least one Fool will always be right.......and another almost always wrong. Is that eponymous ?

    Or just covering all bases ?

    A Fool will always be in the right to us fools.

  • Report this Comment On July 11, 2011, at 6:42 PM, Notfooled1 wrote:

    Motley Fools try to fool us by taking all sides of any issue, and then claiming that they were correct no matter what happens. Don't be fooled. Remember that Motley Fool is a business that wants your dollars.

  • Report this Comment On July 11, 2011, at 6:53 PM, jojohaschiggers wrote:

    What is eponymous? Sounds dirty...

  • Report this Comment On July 11, 2011, at 7:47 PM, jm7700229 wrote:

    Well, XETN, you have Government Motors in your portfolio whether you want to or not. I for one, wish them well; my investment is on the line after all.

    I blame the debt limit issue on the Republicans this time, but only marginally. The only thing that separates us from Greece is that we are still the reserve currency. Take that away and we'll be bankrupt in a couple years. Both sides are risking that, because entitlements are too high and taxes are too low.

  • Report this Comment On July 11, 2011, at 7:50 PM, brewbetter wrote:

    eponymous- being or relating to or bearing the name of an eponym. OK, then,

    eponym-the name derived from a person (real or imaginary): "Down's syndrome is an eponym for English physician John Down.

  • Report this Comment On July 11, 2011, at 8:24 PM, jm7700229 wrote:

    What, BTW, is "Financial Institutions?"

  • Report this Comment On July 11, 2011, at 9:40 PM, dser89 wrote:

    I got a penny stock today called POTG. It has gone up 10% each of the past 3 days. Hopefully it will continue.

  • Report this Comment On July 11, 2011, at 10:36 PM, Dexter0860 wrote:

    dser89

    It will if you continue to use these boards as a place to promote penny stocks and suck others into it. If your up 30% in 3 days take the money and there's no need to push junk on these boards.

  • Report this Comment On July 11, 2011, at 11:51 PM, chrisjrocha wrote:

    I need to disagree on the retailer plays. Its hard to compare Target and Best Buy to Amazon. Totally different ball park. There is a good reason Amazon is priced where its. Its technology easily separates the 3 businesses.

  • Report this Comment On July 12, 2011, at 12:30 AM, warrenrial wrote:

    I guess the Republicans will have to fix the mess Obama and his left wing democrats made. Vote Obama out in 2012 and save America.

  • Report this Comment On July 12, 2011, at 3:18 AM, alan0101 wrote:

    MSFT,TEVA etc stocks to buy now and hold until, when, eternity? How long have these stocks been promising simply because they are out of favour? Is there any news that might not get us stuck for 5 years holding a dodo?

  • Report this Comment On July 12, 2011, at 3:20 AM, alan0101 wrote:

    I thought this was a serious investor board. Reading these stupid ,playground-like, political comments makes me want to just stop reading.

  • Report this Comment On July 12, 2011, at 7:46 AM, boogo2 wrote:

    I dont know if this respectful or not but GM still makes junky cars. Thats the problem. Sooner or later they will have to be bailed again just like chrysler. Ford i love the fusion but its made in mexico. I have no idea whats american made or not.

  • Report this Comment On July 12, 2011, at 8:19 AM, dbtheonly wrote:

    warrenrial,

    Are you so blinded by your politics that you've forgotten 2008? Or do you hope the rest of us have?

  • Report this Comment On July 12, 2011, at 8:53 AM, SAMSCREEK wrote:

    dbtheonly,

    alan0101 and NovaB are still living in the past. They still think everything is Bush's fault. They have forgotten that the Demo's have controlled congress for the last 5 years and the presidency for the past 2 1/2 years and things have gottem WORSE........

    Anyway, the only stock that catches my eye in the above list is NPK, which I plan to research more.

    I like the dividend it pays. I wouldn't touch the auto and drug industry.

    Stocks that I have bought in the past 12 months are CBOE, MAIN, MKC,PNY,HRL,CBL, & WEC.

    Am up 12% so far and would be up more if I had not bought CBOE at a high price, but I have held onto it anyway. Actually thinking about buying more CBOE and average down my total cost per share. I believe it could be a long term stock.

    Ya'll have a nice day. Heat index here in Nashville is suppose to be 113 today.....UGH.

  • Report this Comment On July 12, 2011, at 10:01 AM, justanotherloser wrote:

    National Presto is trading "a LITTLE cheaper" than it was in May???

    Those of us who paid $135 per share for it last May only to see it fall to and settle in at its current price of around $100 would probably challenge your choice of descriptive adjectives!

  • Report this Comment On July 12, 2011, at 1:59 PM, mikecart1 wrote:

    Word to big bird: Best Buy won't be around in 5 years. Neither will other rip off brick-and-mortar retailers like Radioshack. Bookmark this post because I said the same thing about Circuit City back in the day. These places can't hang with places like eBay and Amazon. When you don't gotta pay for the building and dumb employees/clockwatchers, then your margins will always be superior. These are the facts and they are undisputed!

  • Report this Comment On July 12, 2011, at 2:08 PM, pastreet wrote:

    I don't get why people aren't snapping up shares of Microsoft. They are at the point that they've almost become a utility. Their economic moat is huge, cash on hand, excessive, and dominance established. I'll take it.

    Pat

    www.compoundingreturns.com

  • Report this Comment On July 12, 2011, at 5:03 PM, JSinvestmentguru wrote:

    Alcatel Lucent check the December options. I think if you buy the stock long at 5.36 and sell the December 5.00 call the gain is 25-30% annualized..

    5.50 call needs to be .57 but I think you might have to sell the 5.00 call for .94 to net out the same thing...It could drop to 4.32 and you wouldn't lose anything but commission.

    HOG had a recent similar opportunity but is not as good since the recent run up in price.

    Presently Limited (LTD) has good potential with options.

    I am long on AAPL, CAT, HOG, LTD, ALU

  • Report this Comment On July 12, 2011, at 5:03 PM, NEMnyWtch wrote:

    I'm surprised you listed picks in the retail space at all with the current unemployment situation, I just don't think any discretionary spending will really boom any time soon. I like energy in July / August. I like to fill up my oil tank in my house, and add energy to my holdings at this time.

  • Report this Comment On July 12, 2011, at 5:30 PM, TMFBomb wrote:

    @Fordstito,

    I can only speak for myself on Best Buy. Here is a write-up I did in February when I purchased shares for my real-money portfolio.

    http://www.fool.com/investing/value/2011/02/24/rising-star-b...

    @jm7700229,

    Financial Institutions is a regional bank based in New York state.

    @justanotherloser,

    NPK was never at $135 this May. It hit $135 in January.

    Fool on,

    Anand

  • Report this Comment On July 12, 2011, at 6:02 PM, warrenrial wrote:

    Save the country, vote Obama out in 2012.

  • Report this Comment On July 14, 2011, at 8:20 AM, mainelegal wrote:

    Too much politics. Who's in charge of these boards with penny stock hypes and political insults.

    Even though I am a confirmed believer that the GOP has ruined the economy and their congressional team is populated by fools (NOT Fools,) I do not believe this is the place for that type of discussion. It is childish, and the comments are not even remotely clever or insightful.

    Nuf said.

  • Report this Comment On July 15, 2011, at 4:54 AM, ryanalexanderson wrote:

    I like what you did there. Two statements of self-righteous "no political opinions" rant, with a strong partisan political opinion in the middle.

    Mmmm. Hypocrisy sandwich!

  • Report this Comment On July 15, 2011, at 11:54 AM, SkepticI wrote:

    EVEN IF GM is short term attractive (which I doubt) you have to be LONG TERM WARY of a badly managed company -historical- with mediocre products, unable to bring new technology to market efficient only saved by massive government intervention. Did I miss anything here? hmmm maybe that their workforce is among the least efficient in the sector.....

    Is this really the quality of Fool research?

  • Report this Comment On July 15, 2011, at 1:17 PM, newageinvestor wrote:

    Please leave right wing wacko politics out of your stock conversations.

    The fact is that Obama has been willing to compromise Democratic values that are very dear to many of us, only to be met with intransigence by GOPers (some of us call them rethugs) who are only out to protect the rich and some terribly unfair tax advantages they got under Bush. And yes, Bush tax cuts, and his banking deregulation did get us into this. If you think otherwise you're fooling yourself, and I wouldn't take a stock recommendation from you if my life depended on it.

    On the other hand, both parties have clearly sold out, so I'm not so hopeful any of them will really put the country over their campaign coffers.

  • Report this Comment On July 15, 2011, at 2:04 PM, Zootalaws wrote:

    @m7700229 You are kinda right - the US dollar is A reserve currency, not THE reserve currency. The Euro, while only about 1/3 of the reserve status of the $ is rapidly gaining ground as the instability of the dollar worries investing governments. The Pound Sterling and the Yen are both reserve currencies.

  • Report this Comment On July 15, 2011, at 3:15 PM, whyaduck1128 wrote:

    Very nice, newageinvestor. You tell people to leave their right wing wacko politics out of the conversation, then treat us to left wing politics.

    I'm a moderate myself, loathing both sides, and I recognize the sweet smell of hy-po-crisy from both flanks.

  • Report this Comment On July 15, 2011, at 4:32 PM, sgperformer wrote:

    The decision to buy or sell stocks should not be based on personal philosophy - i.e. avoiding GM because it was bailed out. It should be based on thorough research of the company's management, financial books, and other future prospects for profit making.

    I like the fact that GM has streamlined it's operations by reducing managerial red-tape and selling off poor performing products. I like the fact that GM has been tough with the UAW. I like the fact that GM already has a large presence in China and other developing areas. I like the fact that GM's engineers have focused on great style and quality control.

    GM has also been aggressive with forward technology and is positioned nicely to compete with the prius. Dan Akerson may not be an "Auto guy", but that's what I like about him. Obviously we need a guy who isn't going to play by previous "Auto guy" rules. He has been aggressive in all the right directions. Americans will remember this bailout, for awhile at least, and will be watching GM like hawks. And let's face it - they got a ton of free cash.

    Lastly, I recently bought a Chevy Equinox and it is nothing like any pre-bankruptcy GM car made. The feel of the car is simply fantastic. It's fun to drive, surprisingly powerful for an economical crossover, and looks great. I've got 10,000 miles on it (my wife's job requires she drive all over Southern California, mostly in highway stop and go traffic) and we haven't had even the slightest issue with it. Obviously I hope it performs as well for many years, we'll have to see.

    So I don't think GM will return to its past ways of lackadaisical auto production. And I like what I see. But that's just my humble opinion. Some one prove me wrong, I'm all ears!

    TMF SGPERFORMER

  • Report this Comment On July 15, 2011, at 4:43 PM, TMFBreakerRob wrote:

    Hate to be so off topic in this political discussion ;) but I don't like any of these company suggestions with the possible exception of National Presto for the dividend. There was a momentary mention of Amazon which I'd take any day over the others. Hmmmm.....and I have. Doing quite well and expect a continuation thereof for a long time. It's now time for a return to the futile finger pointing and rage. :)

  • Report this Comment On July 15, 2011, at 6:31 PM, jekoslosky wrote:

    NPK quickly fell out of favor after reporting a bad some bad number back in the winter. But all the reasons I bought it a couple years back seem to be there still today.

    It's now one of a few companies in my portfolio (here - http://bit.ly/mBbsyP ) I'm considering adding to soon.

    I'd probably feel worse about the stock had I bought at $135 in January only to see it drop to under $100. But at these prices, it looks as good to me now as it did when I first bought.

  • Report this Comment On July 15, 2011, at 9:33 PM, openidea wrote:

    BEST BUY PROBLEMS ???

    Things are a changing...

    I see better prices at other local stores

    I am see poorer customer experience.

    Except on weekends, the local store seems empty, with more employees than customers.

    And, often, sales associates less than me.

    To me, they look like another Monkey wards or Highland appliance, etc

  • Report this Comment On July 15, 2011, at 9:49 PM, asdfk123 wrote:

    I agree with Microsoft. I’ve been grabbing shares when they’ve been on discount since 2008.

    I’m kind of uncomfortable with brick-and-mortar. The only one I’ve been willing to invest in is Wal-Mart.

    Teva Pharmaceuticals sounds interesting. Thanks for sharing.

  • Report this Comment On July 16, 2011, at 6:52 AM, hopeforfuture wrote:

    I do not like most of the stocks recommended here especially GM. I see GM as a $5 stock in the furure.

    The Volt will put them right back where they were a couple of years ago.

  • Report this Comment On July 16, 2011, at 7:53 AM, Joe4IZ wrote:

    Question first.

    How much of TEVA manufactoring is in Israel? I have nothing against Israel, but the Middle East can explode at any time.

    Second , GM makes good cars. The opinion that they are poorly made is an old mindset from the 1980s. I, however , would not invest in GM because there was no real change in management. They will continue to make bad mistakes while F passes them by.

    TGT may be a good buy, but BBY is not, IMO. TGT still sell enough different items that requires you to visit to shop either casually or for fun. BBY is an electronic store that has terrible customer service (my experience) and is threatened by Amazon and the like. You might try a shirt on at Target, You don't need to try on a flat screen tv. Also, the cost of the flat screen is offset by the saving from shipping. I plan on watching TGT now.

    As others have said, leave the politics out. We all have our own opinions. You are not going to change anyone's mind here.

    Have a great day.

  • Report this Comment On July 16, 2011, at 3:44 PM, RushBabe49 wrote:

    Beware TEVA. Your yield will be reduced by the amount of Foreign Taxes you must pay on your dividends (that's before the US takes its 15%). I sold my TEVA, even though they are a great and growing company, for this reason.

    I consider Microsoft a bad bet, too, as their lunch will be eaten by companies that really innovate, not just buy their new ideas. Even the Digital Goddess (Kim Komando, www.komando.com), says Microsoft is toast.

  • Report this Comment On July 18, 2011, at 12:35 AM, johng88 wrote:

    Walmart has been hurt by Target and a few others. So yes, Target does look good right now. Count on Walmart striking back to restore their leadership of every day lowest price. It really doesn't matter if Walmart is ultimately successful. The collateral damage will be retailer margins at Walmart, Target and others. I'm betting that Amazons incredible customer retention rate and repeat purchase rate will remain unaffected by the price fight.

  • Report this Comment On July 20, 2011, at 7:40 PM, cdenny6 wrote:

    Yes, this seems to be looking like the Yahoo message board!

    I am long TEVA and welcome more input on this stock.

    I also do not like the touting of penny stocks and the other one that someone is really putting time in to sell. Hopefully the Fool can filter these out.

    When all is said and done - buy low and sell high.

  • Report this Comment On March 25, 2013, at 11:30 PM, ML42 wrote:

    In March 2013, 20 months after this article was posted, I reviewed the performance of these 10 stocks. Only 3 (TGT, FISI, CBU) and perhaps a 4th (MSFT) would qualify at all as good investments over that time period (based on a quick review the these stocks' 2-year charts). The other 6 either sustained significant declines in value, or declined and then only recently returned to their July 2011 level.

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