Wall Street has had a tough year so far, while the benchmark S&P 500 Index traded in and out of bear market territory in June. The index is down 19% since the start of the year. But maybe we can turn things around by finding good stocks to buy for July.
Analysts emphasize the importance of long-term investing for retail investors. Edward Jones’ research points out: “Although valuations have already corrected, the likely necessary process of revising earnings forecasts could weigh on sentiment in the months ahead…the pullback creates attractive opportunities for those who have a broader time horizon.
JPMorgan Chase also says, “While bear marks are certainly painful, enduring them is essential for long-term returns.” However, portfolio positioning that takes into account risk/return profiles is important for retail investors.
That said, here are seven great stocks to buy in anticipation of the start of a rally in stock value in the weeks ahead.
|FBHS||Fortune Brands Home & Security, Inc.||$61.71|
|ZBRA||Zebra Technologies Corporation||$299.34|
Stock to buy: DocuSign (DOCU)
DocuSign (NASDAQ:DOCUMENT) provides e-agreement solutions through a DocuSign Agreement Cloud subscription. It has over 1 million paying customers and over 1 billion users worldwide.
In early June, DocuSign reported Q1 FY23 financial. Total revenue was $588.7 million, an increase of 25% over a year ago. Diluted net earnings per share were 38 cents, compared to 44 cents a year earlier. Free cash flow was $174.6 million.
Recently the company announcement an expansion of its strategic partnership with Microsoft (NASDAQ:MSFT). Both go offer new features to improve customers’ ability to sign and manage documents in the cloud.
DOCU stock is down nearly 60% in 2022. The shares are trading at 37.8 times forward earnings and 5.5 times sales. Meanwhilethe median 12-month forecast stands at $73.
Fortune Brands Home and Security (FBHS)
Fortune Brands Home and Security (NYSE:FBHS) manufactures home and security. Its activities are divided into three main divisions: Water Innovations, Outdoors & Security and Cabinets. Some of the company’s best-known brands include MasterLock, SentrySafe and Moen.
At the end of April, Fortune Brands published Q1 earnings. Sales were $1.9 billion, an 8% increase from a year ago. Diluted EPS was $1.31, compared to $1.36 the previous year. Free cash flow was a Release $235.7 million.
Management also announced it would spin off its cabinet business, allowing long-term shareholders to hold stakes in both companies in the new initial public offering. The separation should take about a year.
So far in 2022FBHS shares dropped over 42%. Forward P/E and P/S numbers are 8.9x and 1x respectively. The dividend yield is 1.9%. To finishthe median 12-month forecast is at $86.50.
Payment (NASDAQ:PAYX) is a leading provider of integrated human capital management solutions. One payment out of 12 private sector employees goes through Paychex. Its most popular platform is Paychex Flex, which offers HCM solutions for payroll, time, attendance, and benefits.
At the end of March, Paychex published Q3 FY22 metric. The total income was $1.28 billion, an increase of 15% over the previous year. Diluted EPS was $1.15, down from 96 cents a year earlier. Cash and cash equivalents totaled $267.5 million.
The company recently announcement enhancements to help employers better protect worker health and safety and address worker retention challenges. Wall Street will be paying attention to how these improvements to the Paychex platform can contribute to the bottom line.
PAYX Stock declined 14% in 2022 but won 4% in the last 12 months. The dividend yield is 2.7%. The shares are trading at 28.9x forward earnings and 9.3x sales. Analysts’ median 12-month forecast is $140.
Stock to buy: Qorvo (QRVO)
Token game Qorvo (NASDAQ:QRVO) specialize in high performance radio frequency solutions for advanced wireless devices and communications. Its portfolio includes more than 2,000 products, including amplifiers, frequency converters, integrated circuits and optical components.
In early May, Qorvo reported Q4 FY22 financial results. Revenue was $1.17 billion, against $1.11 billion the previous year. Diluted EPS was $3.12, up from $2.74 a year earlier. The FCF was $295.4 million.
The Pentagon recently selected Qorvo to continue the Starry Nite program. This program aims to develop state-of-the-art radio frequency gallium nitride foundries (SOTA RF GaN) to manufacture 90-nanometer chips for next-generation wireless communications.
QRVO Stock lost around 39% since the beginning of the year. The forward P/E and P/S numbers are 9.2x and 2.3x respectively. Meanwhilethe median 12-month forecast is at $135.
Teradyne (NASDAQ:TER) builds automation devices for two of the most critical elements of manufacturing, namely task automation and electronic testing.
The task automation segment uses collaborative robotics, while the testing division uses automated test equipment. High level customers include Samsung (OTCMKTS:SSNLF), Qualcomm (NASDAQ:COMQ), Intel (NASDAQ:INTC), Texas Instruments (NASDAQ:TXN) and International Business Machinery (NYSE:IBM).
At the end of April, Teradyne published Q1 earnings. Revenue was $755 million, compared to $782 million the year before. Diluted EPS rose from $1.11 to 98 cents. Cash and cash equivalents totaled $795 million.
Recently the company Mark shipment of the 7,000th unit of its J750 semiconductor test platform. Testers include solutions for microcontroller units, wireless devices, and image sensors. Wall Street will be closely watching Teradyne’s Q2 results expected in the coming weeks.
Stock TER fell nearly 48% in 2022. Shares are trading at 18.8x forward earnings and 4.5x sales. To finishthe median 12-month forecast stands at $135.
Water Company (WAT)
Waters (NYSE:WAT) manufactures specialized measuring instruments and software for laboratories. It markets equipment for disciplines such as chromatography and mass spectrometry. The company has 14 manufacturing plants.
In early May, Waters presented Q1 metric. Sales for the quarter were $691 million, an increase of 16% in constant currency. Diluted EPS was $2.80, compared to $2.29 the prior year. Free cash flow was $176 million.
At the recent American Society for Mass Spectrometry (ASMS) 2022 conference, Waters unveiled a suite of new instruments, software and product enhancements to accelerate drug development. The most notable introduction was the new Xevo G3 quadrupole time-of-flight mass spectrometer. It is up to 10 times more sensitive than its predecessor for difficult molecule analyses.
So far in 2022WAT-shares decreased by almost 10%. The front P/E and P/S numbers are 25x and 6.6x respectively. Median 12-month analyst forecast is at $350.
Stock to buy: Zebra Technologies (ZBRA)
Data management set Zebra Technologies (NASDAQ:ZBRA) focuses on many segments that facilitate manufacturing, logistics, retail and healthcare. Its products and services include barcode scanning, specialty printing and radio frequency identification. The company owns more 5,300 patents and has more than 10,000 distribution partners.
In early May, Zebra Technologies provided Q1 financial. Net sales totaled $1.43 billion, an increase of 6.3% compared to a year ago. Diluted EPS was $4.01, down from $4.79 the previous year. Free cash flow was $40 million.
Recently, the company completed its acquisition from Matrox Imaging, a developer of advanced machine vision components and software. Matrox manufactures products that include smart cameras, 3D sensors and vision controllers. This acquisition allows Zebra to better serve customers looking to automate their systems.
Action ZBRA dropped 49% since the beginning of the year. The shares are trading at 15.3x forward earnings and 2.7x sales. The median 12-month forecast is $505.
As of the date of publication, Tezcan Gecgil, Ph.D., had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.