The stock market is near its all-time high, but that doesn't mean there aren't businesses that are still killing it and will likely do so for some time.

We asked three Motley Fool contributors to identify a stock they believe represents a good opportunity to buy this month. Cirrus Logic (NASDAQ:CRUS), Waste Management (NYSE:WM), and Rollins (NYSE:ROL) were their choices.

Computer chip on motherboard

Image source: Getty Images.

Nope, Apple isn't hurting this iPhone supplier

Anders Bylund (Cirrus Logic): This supplier of audio chips to Apple's (NASDAQ:AAPL) iPhones has seen its share price suffer lately. The stock is down 14% over the last month and trading 31% lower in 2018 as a whole. The glory days of 2016 are fading fast, and many investors are giving up on Cirrus Logic altogether.

That's a big mistake. Huge.

It's true that Apple chose not to include a Cirrus-equipped headphone dongle with the latest iterations of the iPhone line. Analysts estimate that this move could cost Cirrus as much as $1 per iPhone in lost business opportunities. For some, this downside erases the benefits Cirrus Logic is experiencing from Apple's love of wireless earbuds -- Cirrus provides the chips to make this setup work on both the earbud and iPhone sides of that connection.

I disagree and expect Cirrus to keep growing its total volume of Apple-based orders as Cupertino's audio strategy continues to evolve. And the wireless components require more-advanced processing technologies, so they should command higher profit margins per chip. That's another detail in favor of Cirrus Logic's rising value.

Moreover, the company is finally starting to significantly expand its audio expertise to the larger Android marketplace. Several leading Android phonemakers shipped wireless headsets and flagship-level handsets powered by Cirrus' audio solutions during the recently reported first quarter, and CEO Jason Rhode expects the next three to four quarters to provide a clearer view of his company's business opportunity in the Android sector.

Cirrus Logic might have finally found a way to make significant money in the smartphone market -- outside of the lucrative Apple contract. Today, Apple represents 76% of Cirrus Logic's quarterly sales. Bringing Android-powered interests anywhere near that level of adoption would nearly double the company's total top line in a hurry.

So Cirrus Logic is exploring a more diverse customer portfolio, while investors appear to have overreacted to a shifting order mix from the company's largest customer. The stock now trades at a bargain-basement 11 times forward earnings, or 9 times trailing free cash flows.

That's an out-and-out steal in my book.

Garbage truck dumping trash at landfill

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A waste stock that's not junk

John Bromels (Waste Management) As the largest waste hauler and landfill operator in North America, Waste Management is in a business that most people don't want to think about. But the company's consistent outperformance, coupled with long-term trends that see a growing population generating more trash, have helped its stock price steadily increase, from below $40 just five years ago to nearly $90. 

What's also been growing is Waste Management's dividend: 27.4% over the last five years as the company passes on its prosperity to its shareholders. Management has been very shareholder-friendly in 2018, issuing a half-billion dollars in dividends and share buybacks in Q2 alone. So far this year, the company has allocated more than 90% of its free cash flow to dividends and share buybacks.

Waste Management is set to report its Q3 2018 earnings on Oct. 25, and many analysts expect another success. In Q2, the company not only raised its annual guidance, but also improved its EBITDA margins by 40 basis points and boosted cash flows by more than 19%. In the run-up to its announcement -- and, if things keep going as well as they have been, immediately after -- I expect the share price to rise again, possibly even into triple digits. On the other hand, if the company somehow misses expectations, a dip in the share price could represent a buying opportunity.

Either way, Waste Management is definitely a top stock to watch this month.

Cockroach bysink drain

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Growth that can't be killed

Rich Duprey (Rollins): Growth by acquisition can be a risky strategy for a company, and one that's difficult for investors. The touted synergies of a deal rarely pan out as expected, and it makes valuing a business more difficult. But pest control specialist Rollins seems to have figured it out.

In just the last two years, Rollins has made 57 acquisitions, and 26 more in the first six months of 2018. It is intent on rolling up the pest control industry under its large and growing umbrella, and says it continues to look for more acquisitions.

What's unique about Rollins' strategy is that the acquired businesses tend to be accretive to earnings right away. That could be because its status as the industry leader attracts well-run businesses to its banner.

Although acquisitions have helped lift revenue for Rollins, it is able to achieve organic growth as well. Last quarter, revenue jumped 10% year over year, and that was split equally between acquisitions and existing businesses. Revenue has risen for 49 consecutive quarters.

Analysts forecast Rollins will see earnings grow 14% this year and 12% next year, with long-term estimates of 10%, in keeping with the pest control leader's steady-state business growth. Rollins hiked its dividend 22% earlier this year, the 16th consecutive year it has raised the payout by double-digit rates. And with the stock pulling back by about 10% from its all-time high, this might be the best chance investors have for buying into this business.

 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Cirrus Logic and Rollins. The Motley Fool has a disclosure policy.