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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers