The summer months are traditionally slow for the stock market, but this year is likely going to be different. With huge news coming out seemingly every day, a global pandemic that is changing the way we live our lives, and one of the strongest tech rallies we’ve seen in recent times, this summer is anything but typical for the market. Although it’s difficult to predict the overall direction that the market will go from here, there are some great stocks in the technology space to consider adding as we head into August.
One of the keys to successful investing is blocking out the noise and simply buying businesses that you believe in. More times than not, adding shares of companies with strong business models and positive market catalysts will work out for you. Here are 3 strong tech companies that should be solid buys for both August and the long-term.
More people are working from home than ever before during the pandemic, and the majority are using this company’s network gear to make it possible. Cisco offers a broad range of different technologies including networking, security, and cloud-based products. It’s a strong buy because it has an established business with an opportunity to expand as the 5G network begins to roll out. You also have to like the fact that Huawei, which is Cisco’s largest global competitor, has been restricted in several countries like the United States.
With a current dividend yield of 3.10%, this stock should be attractive for investors that are interested in a stock that provides extra income. The fact that Cisco has increased its dividend for 9 consecutive years and already bumped up the payout in 2020 is a good sign for the company going forward. In a market where many companies are cutting their dividends, the free cash flow generation of Cisco is something that investors can rely on. The stock is actually down over 17% from a year ago, which offers a nice entry point for investors.
If you aren’t an existing shareholder of this market-leading tech giant, August could be a great time to buy. The company has rocketed up to record highs after reporting strong Q2 earnings which saw year-over-year revenue growth of 11% and EPS growth of 18% percent, even with the pandemic causing many of its physical stores to close down. Sales exceeded forecasts dramatically, with total sales coming in at $59.7 billion versus the forecasted $52.3 billion. The big story was a rebound in international sales, which accounted for 60% of the quarter’s revenue and confirmed that the company’s sales in China came back strong.
The list of reasons why Apple is a stock that you should have in your portfolio is long. First, you have an incredible Q2 earnings beat. There’s also the fact that Apple’s balance sheet has a massive $81 billion in net cash and that the company is a free cash flow generating machine. There’s also a new iPhone release later this year and the steady dividends that the company has to offer. However, perhaps the best reason to buy Apple in August has to do with the 4-for-1 stock split which is scheduled to occur on August 24th. While the stock could run-up before the split, there’s a great chance that new retail investors will be lining up to buy shares of the company at lower prices after the split occurs.
The last stock we will feature for August is a bit riskier due to its exposure to China. However, it might be worth taking on the risk in order to add shares of one of China’s biggest tech conglomerates Tencent Holdings. This gaming and social media giant has added almost $200 billion in market capitalization this year and continues to draw attention from investors thanks to double-digit revenue growth in core businesses like online advertising, video game publishing, and fintech. With famous game franchises like League of Legends and China’s most popular messaging application WeChat under its corporate umbrella, it’s a business that is definitely worth a look in August.
The stock soared in late July after the company offered to buy a major Chinese search engine called Sogou (NYSE: SOGO). This headline tells us that Tencent Holdings is gunning for China’s top search engine, Baidu (NASDAQ: BIDU). If the deal goes through, it’s absolutely a positive for Tencent, which already has a lot of positive momentum this year. Adding shares of one of the world’s most influential technology companies could pay off handsomely, even though the stock is already up over 35% in 2020.
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15 Stocks that Insiders Love
An insider trade occurs when a corporate executive (such as a CEO, CFO or COO) that has non-public information about a company buys or sells shares of that company's stock. Company insiders are required by law to regularly report their stock purchases and sales to the SEC.
Tracking a company's insider trades is a metric that can be used to identify the direction that the company's executives believes that the company is headed. If a number of insiders purchase more shares of their company, they may believe that the company will have strong future earnings and that the share price will increase in the near future.
For example, if Microsoft's CEO, CFO and COO all recently purchased additional shares of Microsoft stock, that would be an indication that there could be unreported news that may positively effect Microsoft's stock price in the near future.
This slideshow lists the 15 companies that have had the highest levels of insider buying within the last 180 days.
View the "15 Stocks that Insiders Love".