The Best Stocks to Invest in July

Five Stocks Outperforming in 2020

A s we head into the second half of 2020, five stocks stand out and could be part of your portfolio. These are not the popular stocks you hear about almost daily such as the FAANG stocks, Facebook, Amazon, Apple, Netflix, or Google. These stocks are making their mark in their respective sectors of the economy and doing extremely well.

Since the March 23 low and the S&P 500 falling 35%, stocks have been on a remarkable climb since then. Investors are also figuring out what are some good stocks to add to their portfolio. Below are five stocks that are leaders among the top stocks on Wall Street.

The stock prices reflected are all at the close of the market on July 6. Current prices you see may differ from what I provided.

Autodesk (ADSK)

Architects, engineers, and construction professionals use AutoCAD to create precise 2D and 3D graphics. Autodesk is a leader in 3D design, engineering, and entertainment software. This software is also used in creating films, video games, and is one of the world’s largest company in this sector. Autodesk runs on Apple and Microsoft Windows computer and mobile systems. Even during the corona virus, this company was holding its own as more workers moved to cloud services. Autodesk started working on a subscription-based service a few years ago and it shows in their numbers. In the last quarter, Autodesk reported a 20% revenue growth and 35% subscription growth. Their cashflow was an impressive $307 million and their customer revenue growth remained in the double digits along with strong subscription renewals. The 2d Quarter took a little hit with the corona virus but the company expects a swift recovery. The future looks very strong as cash flow is expected to reach $2.4 billion in 2022 and a strong economic recovery could make these numbers even higher.

Bandwidth (BAND)

This company is possibly one of the strongest growth stocks in the market. This company is the platform that provides mobile communication supporting companies such as Zoom, RingCentral, Microsoft, GoDaddy, Skype, and Google as they build off the company’s Bandwith platform. This company is also the only company with a Tier 1 network giving clients more control and Bandwidth can increase capacity when needed. Bandwidth looks attractive because they charge on a use basis where more usage means more revenue. So this company grows as the customers grow. Quarter 1 didn’t affect the company too much and the market may benefit mobile users. Growth continues for this company and there may be some delay in the company’s growth due to the effects of the corona virus. Overall the company will continue to be a growth company as numbers will be very strong in the future.

Big Lots (BIG)

Despite the issues the corona virus brought to many businesses, Big Lots performed very well during this timeframe. Big Lots had stores open during the pandemic and they reported higher comparable store sales and strong online sales (+45%). The strong numbers could lead to higher stock prices. The company is trying to give more value to its shareholders as they have put two more members on their board of directors. Second, the company is working to transform with their sale/leaseback transaction of its four distribution facilities worth $550 million to improve liquidity leading to share buybacks and maintain their 2.5% dividend. Management had good news in June as they boosted their 2d Quarter outlook. The company is running better than expected with earnings expected to increase to $2.50 per share compared to 84 cents. Management hinted their strength was seen across all merchant categories with $720 million liquidity returning more cash to shareholders (buybacks). A sustained growth trend could be expected for Big Lots.

Marvell Technology (MRVL)

Companies need to transform to stay relevant. With Marvell Technology, they have done that. They went from chipmaker to a data infrastructure outfit with chips that play into a variety of growth trends such as data center solutions, enterprise and carrier networking, advanced automotive products, wireless connectivity, and various storage networking products. The corona virus has increased demand for this company’s cloud data center and 5G products. This trend should continue as the economy reopens and chips for Advanced RISC Machine (ARM) servers demand increases. Quarter 1 report in May exceeded expectations (sales up 5% and earnings up 13%). Analysts expect many more quarters of accelerating growth as cloud revenue reached 10% for the first time in this company’s history. The overall networking revenue increased by more than 10% from the previous quarter and expected to go much higher. With a pickup in 5G demand, the wireless infrastructure benefitted despite some industry hiccups. There were some growing pains with the transition from 4G to 5G. Analysts expect earning 44% in 2020 and 48% next year. The future looks bright for Marvel.

Trade Desk (TTD)

With technology changing, Trade Desk is at the forefront of helping companies in advertising technology. This company is one of the leading companies offering agencies and their advertisers the best in technology to display their advertising campaign. Trade Desk is in the streaming space and the largest benefactor of the interconnected TV (also called CTV) ad impressions across major networks including Amazon and Disney. The recent shutdowns have accelerated the transition to CTV while changing the media landscape and driving more advertisements in this direction. This market expects to surpass traditional TV in 2020 reaching over 80 million US households. Trade Desk has been growing for years with ad buying. In the 1st Quarter, sales were up (33%) and earnings per share were up (84%). The corona virus decreased ad spending for some categories such as auto, fashion, and travel while stronger sales came in for fitness, technology, education, and gardening. Political ad spending is also up because it is an election year. Virus related ad buying will likely see a pullback but big investors see Trade Desk as a growth story for the remainder of the year. The long term outlook is bright for this company.

Check out my past stock articles.

The writer owns shares of BIG in his portfolio.

Tom Handy is a top Investment and Bitcoin writer on Medium, and father of two kids. He retired from the Army and sits on several non-profit boards. Tom is the top Yelper in his community and a top Google Guide. He’s on several social media channels and you can find him on Twitter @tomhandy1 and Instagram @tomhandy1.

This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.

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