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
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
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
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 |
$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
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
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.