Typically, the stock market is quiet during the summer months, but that is likely not going to be the case this year. Although the virus has taken a turn for the worse in the United States, investors seem to have faith in the Federal Reserve and the lengths it will go to provide liquidity in financial markets. There is definitely some positive momentum in the market at this time and its quite possible that July turns out to be another great month. With that said, headline risks are still present which could mean increased volatility, particularly if parts of the economy are forced to shut down again.
Regardless of what is happening in the news, there are always great buying opportunities to be found in the stock market. With stocks that offer exposure to digital entertainment, value to be found in diversified high-yield dividend payers, and tons of momentum surrounding work-from-home stocks, July features great buying opportunities for every type of investor. Let’s take a look at the top 3 stocks to buy for July below.
Get in the Game with Take-Two Interactive Software (NASDAQ: TTWO)
Buying a stock in July that has exposure to the videogame industry should pay off handsomely, especially if you go for a company with some of the best-known franchises. This software company has the rights to the best selling entertainment property of all time, Grand Theft Auto 5 and posts consistently strong earnings. With new gaming systems like the PlayStation 5 coming to market soon and more gamers playing than ever before, Take-Two Interactive is thriving. In FY 2020, which concluded in March, Take-Two grew its revenue and EPSby 16% and 21%, respectively.
Video games are a staple of digital entertainment and have been in even higher demand than usual due to stay-at-home orders. In fact, Nielsen reported that the U.S. saw a 45% spike in videogame usage during the week of March 23-29. It’s very likely that we are entering the golden age of videogames, and Take-Two should be the beneficiary. If the country has to go back to stay-at-home orders this month due to increasing cases of COVID-19, the stock could go higher. It’s a great buy if you are interested in gaining exposure to the video game industry.
Camping Out with Newell Brands (NYSE: NWL)
If you are interested in a nice dividend-yield stock with a solid portfolio of home goods brands, Newell Brands is a strong option this month. With well-known brands like Paper Mate, Yankee Candle, Sharpie, Coleman, Marmot, Mr. Coffee, and Rubbermaid, it’s a company with products that have consistent demand. Additionally, if consumer preferences shift, there is enough diversity in its product line to help Newell adjust. The stock currently offers a 5.7% dividend yield and has a shot at making new 52-week highs in July.
Although there is some risk involved with this company, especially since net sales in Q1 took a hit due to the pandemic and the fact that it has some supply chain issues to work through, the summer months should help the company’s sales rebound. If you’ve ever been camping or spent time outdoors, there’s a good chance that you’ve used Newell Brands products such as goods from Coleman or Marmot. Its Appliances and Cookware segment could also see an uptick due to more people eating at home as a result of the pandemic. Buying shares of Newell Brands in July could reward patient dividend investors.
Picking Up the Slack (NYSE:WORK)
We know how hot technology stocks have been, and when you have a company with a great business model that is capitalizing on the work-from-home movement, it’s a great pick in today’s market. Slack Technologies is a software business that has developed a collaborative platform that helps connect employees within a company. The company added 90,000 new customers during Q1 but hasn’t quite risen in value like other work-from-home darlings such as Zoom Communications (NASDAQ:ZM).
Slack is worth a look this month because of it’s new Slack Connect set of tools that launched on June 24th. The purpose of Slack Connect is to allow companies to collaborate with outside partners in real-time. It helps up to 20 organizations connect together via applications, chat features, and other shared channels. The idea is that Slack Connect will eventually replace email entirely by providing a more secure and efficient mode of business communications. Although Slack faces stiff competition from Microsoft Teams, the company is picking up big customers like Verizon and has a chance to become a nice growth story in the coming years.
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The Next 5 Retailers on the Edge of Bankruptcy
Through no fault of theirs, the novel coronavirus has put some retailers on the edge of bankruptcy. And as you’ve seen, many have fallen over that edge including iconic names like Nieman Marcus, J.C. Penney and J.Crew.
In fact, according to the American Bankruptcy Institute, there were 560 commercial Chapter 11 filings in April. That was a 26% increase over last year. And executive director, Amy Quakenboss, suggests that there are more to come.
“As financial challenges continue to escalate amid this crisis,” observes Quakenboss, “bankruptcy is sure to offer a financial safe harbor from the economic storm.”
With no revenue walking through the door, many retailers are seeing a semblance of revenue from e-commerce sales. But for some retailers, the shutdown is more impactful because they didn’t have a strong e-commerce structure. That means that they rely more than others on brick-and-mortar sales.
The real question now is will there really be the pent-up demand that some analysts still swear is just waiting to be unleashed. It may indeed exist. Time will tell. But time is not a commodity many of these retailers have. And we’ve identified five retailers for which the clock is not in their favor.
View the "The Next 5 Retailers on the Edge of Bankruptcy".