3 Stocks to Buy in June

Three of the top banking and financials analysts writing for Fool.com and give their "best ideas" for right now.

Jun 8, 2014 at 10:17AM


Photo credit: Pascal Vyncke

What do Realty Income, TD Ameritrade, and JPMorgan Chase have in common? Not much unless you are talking about cheap stocks.

When an investor talks about an "idea," it's often a nod to an investment with potential, but one that he or she hasn't finished vetting. Perhaps it'll be a winner, but maybe further research will cause the investor to toss that idea in the junk pile.

But what happens when you ask investors to offer up their "best ideas" -- that is, the ideas they're most confident in and have done the most research on? Well, you're about to find out, because we reached out to three of the top banking and financials analysts writing for Fool.com and asked them to give us their "best ideas" for right now.

Patrick Morris: Realty Income has been on my radar for months, and June will be the month when I decide to buy in.

I've said it before, and I'll say it again, one of the things I appreciate most about the real estate investment trust, which owns nearly $10 billion worth of property across the U.S., is its diversity. The companies leasing from it span a variety of industries, 49 states, and no single tenant makes represents more than 5.5% of its revenue.

And while the property landscape was once somewhat troubling, it has also clearly recovered from the recession. Despite the fact it has added nearly 1,600 properties since 2011, it turns out the number of unoccupied ones has actually fallen by only 13.

Although it trades at a higher multiple than peer American Realty Capital Properties -- a 16.6 price to adjusted funds from operations versus 12.0 for ARCP -- the reality is, the remarkable success of Reality Income over the last 20 years since it went public warrants the lofty valuation: 


Realty Income has a lot going for it, and while the lofty 5% dividend it offers grabs headlines, that is just one of many things making it worthy of an investment consideration.

Eric Volkman: Everybody and their brother wants in on this bull market we're currently cruising through. There's a lot of stock trading in them thar hills, and that's why I'm keen on brokerage stocks in general and TD Ameritrade in particular.

The company's got rock-solid management that's been delivering consistently good results for years now. In fact, both of its last two quarters saw TD Ameritrade notch fresh record highs for net revenues. The company's been moving a lot of paper, and roping in plenty of new clients while doing so. Its daily average revenue trades (a key metric in this business) advanced at a 17% year-over-year clip during this past April, while the percentage increase was similar for total client assets.

For me, TD Ameritrade still beats the competition where it counts. Its services appeal to the everyday investor, as opposed to the somewhat wonky crowd Interactive Brokers (NASDAQ: IBKR) caters to, while it's an operation more efficiently focused on brokering when compared to sprawling competitors Charles Schwab (NYSE: SCHW) and E*TRADE Financial (NASDAQ: ETFC). Oh, and among that crowd TD Ameritrade's current $0.12 per share dividend is the highest in terms of amount, while the yield on that payout (1.6%) comes in a close second to Interactive Brokers' 1.7%.


Jay Jenkins: This month I'm buying JPMorgan Chase. Why? Let's start with profits.

Fundamentally when you buy a stock, you are buying an ownership stake in the company. It's not about watching the stock's price chart rise and fall every day. It's about that business' ability to make money today and in the future. It's about future profits and future cash flow.

To understand a bank's long term profit potential in today's environment, we must strip away all the fluctuating legal expenses, gains from one time only asset sales, and reserve releases to really see the core earnings that will drive the franchise for 5, 10, or 20 years. Following that methodology with JPMorgan, the company earned $23 billion last year.That's about $5.94 per share in core earnings.

The bank is trading at $57 per share at the time of this writing, which represents 9.4 times earnings. At that ratio, JPMorgan today is not just on discount, it's a flat out steal.

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour (That's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

Eric Volkman owns shares of TD Ameritrade. Jay Jenkins has no position in any stocks mentioned. Patrick Morris has no position in any stocks mentioned. The Motley Fool recommends Interactive Brokers and TD Ameritrade. The Motley Fool owns shares of JPMorgan Chase and TD Ameritrade. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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