School is back in session, fall is on the way, and it's always a good time to be thinking about how to put your money to work for you in the stock market. We asked some of our top Motley Fool contributors covering technology and consumer goods stocks to weigh in on their top choice for a stock to buy in September. Check out what they had to say.
Andrés Cardenal: Priceline (BKNG -0.45%) is the growth leader in the online travel business, an exciting industry providing plenty of opportunities for growth in the long term. The company benefits from a dominant market position in international markets, which has allowed Priceline to outgrow its main rival Expedia (EXPE 0.55%) over the last several years.
Priceline's Booking.com platform has consolidated a gigantic network of 525,000 hotels and other accommodations in 205 countries as of the second quarter of 2014. This represents a huge increase of 58% versus the same period in 2013, and it shows that Priceline is cementing its competitive position in the business at remarkable speed.
In addition, Priceline is expanding via partnerships and acquisitions, such as its broadened alliance with Chinese online travel company Ctrip.com and the purchase of online restaurant reservations platform OpenTable.
Priceline produced $13.54 billion in gross bookings during the second quarter of 2014, a big annual increase of 34%. International markets provided the bulk of Priceline's business, bringing in $11.68 billion, or 86% of total gross bookings during the quarter. Because of its low-cost business model, the company generates huge profit margins in the neighborhood of 34.5% of revenue at the operating level.
In a nutshell, rapidly growing sales and sky-high profit margins look like a winning combination for investors in Priceline over the years ahead.
Rick Munarriz: Time hasn't been kind to Microsoft (MSFT -1.27%), and September is kicking off with larger players in the smartphone space unveiling their shiny new devices. It also doesn't help that its Xbox One continues to lose ground to the PS4. That may all be true, but have you noticed that tablet sales are starting to fade with the PC starting to mount a surprising comeback? The trend may be benefiting Chromebooks at the low end and Macs at the high end, but this is still a market dominated by Microsoft. That should become even more apparent later this month when, sources tell tech blog The Verge, Microsoft will unveil Windows 9.
It's against this retro-chic PC revival that Microsoft offers a compelling opportunity for investors. It's reasonably cheap at less than 15 times next year's projected profitability. The stock yields a respectable 2.6% with plenty of room to move higher given the software giant's low payout ratio and ample cash reserves. There's also new leadership at the helm for anyone blaming Steve Ballmer for Microsoft failing to latch on quickly to the booming smartphone and once-disruptive tablet trends. Microsoft could be the next Microsoft.
Anders Bylund: In recent weeks, I dug into the 3 biggest reasons why American Tower (AMT 0.17%) shares might rise soon, and then the 3 biggest threats to the stock. One was much easier to write than the other.
Yes, the cell tower operator works in a fiercely competitive industry, and yes, its network was built on massive loans. Beyond that, I struggled to find any sincere problems with American Tower or its stock.
I'll admit that my third threat factor -- "American Tower is indeed vulnerable to some risks it cannot control" -- was kind of a stretch. Try as I might, I just couldn't do any better on the pessimistic side of the American Tower equation.
The optimistic view came so much easier. American Tower generates robust cash flows, runs a surprisingly safe and predictable business, and is grabbing international growth opportunities with both hands.
American Tower is owned or recommended by three different Motley Fool newsletters, and for all the right reasons. The stock has skyrocketed over the last year, but has room to run further over the long haul. It's rare to see the bull arguments weighing this much heavier than the bearish reasoning.
Sam Mattera: T-Mobile (TMUS 0.92%) stock looks like a buy going into the fall. Shares of the nation's fourth-largest wireless provider tumbled last month after Sprint (S) backed out of its well-telegraphed acquisition bid, but the company remains in play.
Dish Network is said to have contacted T-Mobile's parent company -- Deutsche Telekom -- about its own potential bid. In recent years, Dish Network has been amassing wireless spectrum assets with the intention of breaking in to the wireless industry. Though it failed to acquire Sprint, Dish could still make good on its plans with an acquisition of T-Mobile. French company Iliad is also interested. Deutsche Telekom rejected Iliad's initial bid, but the company could come back with a higher offer. The interest of multiple suitors could trigger a bidding war -- it happened with Sprint last year.
While some sort of acquisition seems likely, even if T-Mobile is not acquired, the company looks to be in good hands. CEO John Legere's aggressive reforms have succeeded in shaking up the wireless industry, and T-Mobile has consistently added more subscribers than its rivals in recent quarters.
Tamara Walsh: Apple (AAPL -1.22%) stock has enjoyed a solid run so far this year, with its stock price surging more than 25% year-to-date. However, there could be more momentum ahead for shares of Apple following the iDevice maker's product refresh this week. At a media event on Tuesday the tech giant unveiled two new, larger iPhone models, as well as a smartwatch and payments platform called Apple Pay. Apple already has the payment information for around 800 million iTunes and App Store customers. Therefore, this move puts Apple in an advantageous position to capitalize on the growing mobile payments market. Meanwhile, the wearable smart watch device marks the first new product category for Apple in about four years.
While all of this is certainly exciting for Apple fans, the tech giant has more going for it than a fresh product pipeline. For starters, shares of Apple look attractive with a price-to-earnings-growth ratio, or PEG, of 1.33, which is below the industry average of 2.26. Even after the recent run up in the stock, shares still trade at a forward P/E of just 13 times next year's earnings.
Another reason to own Apple shares is that the stock pays an annual dividend of $1.88 per share, which works out to a yield of 1.9% at Tuesday's closing share price. Not to mention, investors can rest easy knowing Apple will be able to increase its dividend for many years to come thanks to the company's cash-heavy balance sheet and light long-term debt load. This, paired with Apple's new product pipeline, should be a catalyst for the stock in the months ahead.
Steve Symington: I think now's a great time to buy Buffalo Wild Wings (BWLD). The beer, wings, and sports chain regularly outperforms its casual-dining peers, and last quarter grew revenue by 20% on impressive same-store sales growth of 7.7% and 6.5% at company-owned and franchised restaurants, respectively. That led to a 43.8% jump in net earnings, but the stock plunged after its raised full-year earnings guidance just wasn't spicy enough to appease Wall Street's lofty appetite for growth.
Buffalo Wild Wings also recently added $3 million to its minority stake in PizzaRev, and subsequently announced the acquisition of a majority stake in street taco specialist Rusty Taco -- both small fast-casual chains which management insists can be expanded nationwide. Over the long term, this will help Buffalo Wild Wings achieve its stated goal of using a portfolio of diversified brands to nearly triple its current restaurant count to 3,000 locations worldwide. For patient investors willing to endure short-term volatility as that plan comes to fruition, the financial rewards should be more than satisfying.
Tim Beyers: Media stocks have been rallying right alongside the rest of the market in 2014, but at least one is trading well below its short- and long-term potential. Time Warner (TWX) merits less than $77 a share as of this writing -- not even a month after Twenty-First Century Fox (FOXA) revealed an $85-a-share bid for the company. Just coming square with the price Rupert Murdoch was willing to pay would result in a 10% bump for today's investors.
And yet, over the longer term, Warner stock could trade for much more than it does today. Consider its assets. Unlike Disney (DIS 0.16%), which has spent years cashing in on minor Marvel Comics characters, Warner is only now leveraging lesser-known DC Comics characters such as Green Arrow and The Flash. As CEO Jeff Bewkes said during the most recent earnings call:
Warner will have 31 shows on broadcast networks [this fall] ... five of those shows are based on IP from DC Entertainment, including the highly anticipated Gotham on Fox, The Flash on TheCW, and Constantine on NBC. That's early evidence of Warner's ambitious plans to further mine the DC catalog across our television, film, video game, and consumer products businesses.
How quickly the bet on more obscure DC properties pays off is hard to say, but it seems highly unlikely that Warner will continue trading for less than half of Disney's market cap.
Ashraf Eassa: Taiwan Semiconductor (TSM -3.45%) is looking pretty good to me. Given the enormous capital requirements associated with owning and operating chip manufacturing plants, many companies choose to outsource the production of their designs to third parties.
Taiwan Semiconductor is by far the largest such manufacturer, according to IC Insights, generating nearly five times the revenue of its closest peer .
It has been widely rumored that Taiwan Semiconductor will build Apple's A8 processor found inside the just-released iPhone 6 and 6 Plus smartphones (historically Apple's A-series processors have been built by Samsung).
While teardowns of the chip have yet to officially confirm this, it's probably not a coincidence that Taiwan Semiconductor just reported a 25.8% increase in its sales year-over-year for the month of August – the highest year-over-year growth it has reported this year.
That said, recent statements from Taiwan Semiconductor regarding its competitive positioning during 2015 have investors worried that it could lose share next year.
While only time will tell how share shifts in this market, and while competitive threats shouldn't be dismissed, the company should benefit nicely from the new iPhone ramp. And, as long as the overall market for semiconductors remains robust, Taiwan Semiconductor should continue to thrive.
