5 of the best stocks to buy for September
Historically speaking, September is one of the worst months for stocks. So why write an article about five of the best stocks to buy for September?
The answer comes down to a basic truth. Long-term investors know it and short-term traders won’t admit it: It’s impossible to consistently time the stock market.
Thankfully, another law of Wall Street is that in the long run, stocks go up. A lot. In the 50 years between 1966 and 2015, the Standard & Poor’s 500 index rose at an average annualized rate of 9.7 percent. Every $1 you invested became more than $102.
Over time, it doesn’t matter which month of the year you’re buying stocks, as long as you’re doing it early and often. The companies below all have things going for them right now – and enjoy attractive long-term characteristics, too.
So, here they are: five of the best stocks to buy for September (and then own for as long as you can).
It’s not the most original pick in the world, but September is a huge month for Apple. Markets expect AAPL to announce three new iPhones, including its 10th anniversary iPhone that could go for as much as $1,000. Rumored features like 3D facial-recognition technology and wireless charging, if included, would be major steps forward in mainstream consumer technology.
“Apple investors should continue to focus on its continued growth in services as well,” says Trip Miller, managing partner at Gullane Capital Partners.
Its enviable free cash flows and unparalleled amounts of cash on its balance sheet also give AAPL what Miller calls “optionality,” or the ability to research, develop and bring to market any number of potential game changers.
“Apple’s next great product may not be a product; it may be in their services business,” Miller says.
The next iterations of the Apple Watch and Apple TV, as well as the debut of HomePod, the Siri-enabled smart speaker, should also come in September. With Apple shares trading at 19 times earnings and paying a 1.6 percent dividend, AAPL would be one of the best stocks to buy in any month, but September’s catalysts brighten the appeal.
National Beverage Corp.
The best stocks to buy come in all shapes and sizes, and compared with Apple FIZZ is minuscule.
With a market value of a little more than $5 billion, you could stack 150 National Beverage Corps on top of each other and still not be worth as much as Apple.
This mid-cap beverage stock was about as exciting as its ho-hum name until a few years ago, when one of its smaller brands, LaCroix, began to pop. The flavored sparkling water quickly became a cult sensation and took FIZZ shares along for a popularity contest of their own; shares are up 526 percent in the last three years.
LaCroix isn’t necessarily doomed to be a short-term catalyst and nothing more. In fact, FIZZ could be one of the great long-term stocks to buy too if LaCroix can keep bubbling up in popularity and boost its sparkling-water market share well beyond its current humble level in the low double digits.
It’s not guaranteed, but it’s doable.
Most investors don’t buy MCD stock for its CEO. They buy it because it’s a steady Eddie, a reliable, predictable, cash-flowing blue-chip stock with one of the world’s most recognizable brands and a hefty quarterly dividend check to boot.
McDonald’s stock still boasts all the above. Except now, it’s got an all-star CEO, too – and yes, he’s good enough for it to factor into your investing decision.
The best stocks to buy often have next-level CEOs, and Steve Easterbrook, who took over in March 2015, fits in that category. He took a stock that hadn’t budged in three years and began an aggressive turnaround plan. Easterbrook boldly embraced all-day breakfast, reduced menu complexity, spearheaded mobile ordering and launched an app with daily deals, to name just a few things.
Same-store sales growth returned and shares are up more than 60 percent since his debut, quadrupling the returns of the broader market.
Nowadays, MCD is a steady Eddie that can also grow – and it pays shareholders a 2.4 percent dividend just for watching the fireworks.
You may not know Zoetis, but you’ve almost definitely benefited from its services in some way. Zoetis is a health care company, providing medicine, vaccines, diagnostics and more – but strictly for animals.
It addresses two segments: companion animals and livestock. Livestock is the bigger segment by a smidge, but cuddly companion animals are clawing away at that lead, one pocketbook-lightening trip to the vet at a time.
“Zoetis is well positioned to benefit from two secular trends: the growth in pet ownership and the growth in animal protein in emerging markets,” says Linda Bannister, senior equity analyst for Edward Jones.
“As more people enter the middle class in emerging markets, the demand for animal proteins also picks up,” Bannister says.
As with any stock, though, ZTS isn’t flawless.
“The stock has done quite well but the one negative is the valuation,” Bannister says, noting her “hold” rating on ZTS shares, which have risen 21 percent in the last year.
It’s tough to hate an e-commerce play in this day and age, and the last but not least of the best stocks to buy for September is precisely that.
Stamps.com has built an empire around the concept of convenience: Get all your postage and shipping needs taken care of online; forget those cumbersome treks to the post office. Emphasizing efficiency in advertisements aimed at entrepreneurs and small businesses has paid off, and sales soared 70 percent higher in 2016.
Analysts expect more muted growth – 24 percent – in 2017, but Stamps.com still has plenty of fans on Wall Street.
“It’s definitely a very high margin business for them; I would say they’ve evolved for the last 15-plus years they’ve been in business,” says Tim Klasell, a cloud and data center software analyst for Northland Securities who covers Stamps.com.
Like several other stocks on this list, STMP is a stock that’s been hot recently. Hot is nice, but you should always be aware of a company’s potential weaknesses – because they always exist!
“The negotiations they have with the postal service about pricing their services are somewhat opaque,” Klasell says. “And you’ve got a concentrated supplier in the postal service so that always brings a bit of a risk to the story.”
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