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Hot Cheap Stocks To Invest In Right Now

There are ton of high-growth stocks out there. Everyone talks about the FANGs all the time. There are also all the hyper-growth Chinese internet stocks, the class of digital retailers which are riding e-commerce tailwinds to super-charged growth rates, all those big-growth cloud companies and a ton more.

In sum, there are a bunch of high-growth stocks in the stock market. But not all of them are stocks you should buy. And not all of them are stocks you should buy here and now.

After all, when it comes to the stock market, timing is everything.

With that in mind, here’s a list of four high-growth stocks which could be big winners in July.

Hot Cheap Stocks To Invest In Right Now: Shopify Inc.(SHOP)

Much like Alibaba and iRobot, Shopify Inc (NYSE:SHOP) is a secular growth stock which has hit a rough patch recently.

At its core, Shopify is a company which provides omni-commerce solutions for retailers of all sizes. Namely, this involves providing uniform sales capability across multiple digital retail channels (social media, website, mobile, etc) to both digital retail entrepreneurs and huge enterprises. This business model falls in the overlap of two mega-trends (e-commerce and decentralization), and as such, Shopify’s growth has been huge and the stock has been a big winner.

But Shopify stock has dropped off its highs recently due to legislation. In a landmark decision, the Supreme Court recently ruled that states have the constitutional power to require collection of sales taxes from digital retailers. Many market watchers view this is a big negative for all of e-commerce, since it means higher prices will now get passed onto consumers. That could slow down the e-commerce revolution, and investors are selling Shopify stock as a result.

But that won’t happen. E-commerce’s benefits are multi-faceted, and stretch far beyond low prices. Namely, e-commerce offers a wide array of convenience benefits which are ultimately unaffected by the Supreme Court’s ruling.

Meanwhile, Shopify also thrives due to its exposure to the decentralization megatrend. That megatrend is hardly affected by recent legislation.

Overall, then, the robust Shopify growth narrative which includes powering the e-commerce and decentralization mega-trends remains largely in tact. Consequently, Shopify stock could have a huge bounce-back in July as negative sentiment from the Supreme Court ruling normalizes.

Hot Cheap Stocks To Invest In Right Now: Uniti Group Inc.(UNIT)

Uniti Group (NASDAQ:UNIT) focuses on a different type of real estate than most real estate stocks. Specifically, the REIT focuses on communications infrastructure. Uniti’s portfolio consists of fiber networks, towers and other infrastructure related to telecom. The company operates both in the United States and Latin America.

The customer base for such REITs usually consists of the country’s largest telecom providers. In UNIT’s case, their primary customer has been the struggling firm Windstream Holdings (NASDAQ:WIN), from whom UNIT stock spun off. At its peak, WIN accounted for 65% of Uniti’s revenue. As WIN heads toward a possible bankruptcy, UNIT has moved away from the troubled telecom company.

Though the relationship with WIN exposes UNIT investors to possible perils, one developing phenomenon could make it worth the risk — 5G. The major telecom companies will each spend tens of billions of dollars over the next few years to build 5G telecom networks. 5G will increase speeds exponentially. Consequently, this will increase the demand for towers, small cells and fiber networks. This need for more infrastructure will be a boon to telecom REITs.

The current annual dividend stands at $2.40 per share, which brings the yield to about 11.8%. Analysts predict earnings per share (EPS) of $2.51 for 2018. Hence, the dividend should sustain itself despite the issues with Windstream. Stock appreciation also remains a possibility. At just above $20 per share, it trades approximately in the middle of its 52-week range. UNIT stock traded as high as $32.73 per share in 2016.

It could reach that high and beyond with the increasing demand for telecom real estate. Increased demand would also increase profits, creating a virtuous cycle that also takes the dividend higher. For those that can stomach the risks associated with Windstream, UNIT stock could profit investors on both income and growth.

Hot Cheap Stocks To Invest In Right Now: Intuitive Surgical Inc.(ISRG)

Intuitive Surgical (NASDAQ:ISRG) is my pick from the healthcare sector. Up 34% YTD through July 2 compared to 12% for its medical instrument peers, it has managed to deliver an annualized total return of 44% over the past three years, 2.5 times the return of its peers.

I first recommended ISRG in March 2013. I reaffirmed my recommendation four months later despite it falling by 13% on concerns the company’s da Vinci robotic surgical systems — which cost in the millions to purchase — would no longer be a spending priority for hospitals looking to cut costs under Obamacare.

I wasn’t buying the word on the street feeling surgeons would continue to clamor for their use and hospitals would comply. Since 2013, revenues have grown by 38% to $3.1 billion, while non-GAAP net income has increased by 56% over the same period to $1.05 billion from $671 million.

In May, Intuitive Surgical announced that the FDA approved its da Vinci SP robotic system for use in single-incision urological procedures.

Shipments of the new product will begin in Q3 2018, providing another growth vehicle for ISRG, the leaders in medical technology for minimally invasive procedures.

I don’t see Intuitive Surgical slowing down anytime soon.

Hot Cheap Stocks To Invest In Right Now: iRobot Corporation(IRBT)

For all intents and purposes, iRobot Corporation (NASDAQ:IRBT) is the face of the global consumer robotics revolution.

iRobot is most famous for its robotic vacuum cleaner, but it also makes other household robots, such as a robotic pool cleaner and robotic mop. It is also rumored that the company is going to extend its product portfolio to soon include other robots, such as a robotic lawnmower.

From this perspective, iRobot is much more than just the company behind robotic vacuum cleaners. They are a company leading a household consumer robotics revolution which has a wide array of applications.

IRBT stock, though, doesn’t always act like this is the case. Over the past two quarters, IRBT stock has dropped like a rock because management has provided weak profit guides. But those weak profit guides are a direct result of the company investing into new products, which grow the company’s addressable market and add firepower to the long-term growth narrative.

Overall, then, such margin concerns are unnecessarily short sighted. It seems the market is starting to realize this, and IRBT has been bouncing back lately.

Second quarter earnings are due at the end of the month. Those number should be quite good as Google Trends for iRobot have remained quite favorable. Those strong numbers should affirm the recent bounce in IRBT stock, and send this stock back to all-time highs.

Hot Cheap Stocks To Invest In Right Now: NutriSystem Inc(NTRI)

Like Weight Watchers, NutriSystem reported stronger-than-expected results. NutriSystem also raised its fiscal 2018 earnings per share guidance to $2.04-$2.14 from $1.99-$2.09 and increased its full-year top-line outlook to $693 million-$708 million from its previous guidance of $685 million-$705 million.

NutriSystem has rallied around 30% since it reported its results, but NTRI stock is still trading at a low forward price-to-earnings ratio of around 16.

NutriSystem appears to be developing innovative new marketing segmentation strategies and potent new products. For example, the company has launched ads targeting diabetes patients and later this year, responding to demand it identified among its customer base, will begin targeting vitamin users with a new line of vitamin pack products.

Additionally, NutriSystem says that the engagement with its app is rising and it has identified proven marketing techniques of recapturing former customers who have left the program. Finally, the company recently added 19 new items to its menu, suggesting that it is focused on incorporating additional, innovative, popular foods to its offerings.

In my experience, companies that innovate frequently and significantly are much more likely to succeed than those that largely stay with the status quo. Judging by Nutrisystem’s results, the company’s significant, frequent changes on the product and marketing fronts appear to be working. These effective adaptations make NutriSystem stock very attractive.

Finally, the revenue generated by NutriSystem’s South Beach line jumped 150% year-over-year in the first quarter, suggesting that the line’s popularity is rapidly increasing.

Hot Energy Stocks To Buy For 2019

Emerging markets look attractive buoyed by improving economic growth in a number of developing countries, a pickup in manufacturing activity, rise in commodity prices, better current accounts balances, building foreign reserves, better-than-expected earnings, and several structural reforms taken by governments.

Governments of China, South Korea and Philippines have taken large infrastructural projects. Massive government spending are also supporting private investment growth in the region, particularly in the export-oriented industries.

Meanwhile, tax reforms and business-friendly policies of the governments are bolstering investment in several Latin American countries, including Argentina, Brazil and Chile. Argentina recently proposed to reduce corporate tax rate from 35% to 25% and the lowering of employer social security contributions.

Of late, emerging markets have achieved a significant position in the global investment space. To boost growth, several emerging economies have been resorting to policy easing via interest rate cuts or offering some accommodative measures.

In 2018, emerging markets may emerge as hidden gems in the global investment arena. We have narrowed down our choices to five stocks each sporting a Zacks Rank #1 (Strong Buy) and strong growth potential.

Hot Energy Stocks To Buy For 2019: Ethan Allen Interiors Inc.(ETH)

Ethan Allen Interiors Inc. (NYSE:ETH) is a turnaround play, pure and simple. Revenue has dropped over 1% through the first three quarters of the company’s fiscal 2018. An effort to redesign a substantial amount of the company’s product line and update its brand image has had some hiccups, in terms of both production and demand. Margins have weakened, and adjusted EPS has dropped about 10% so far this year.

But investors can get “paid to wait” and Ethan Allen has cleaned up its balance sheet in the meantime. Debt has dropped to under $2 million, against $52 million in cash. The dividend has been raised steadily over the past few years, and ETH now yields a solid 3.1%.

And there is room for a turnaround here. Ethan Allen remains a well-known, high-end brand. It’s possible that the resurgence at Restoration Hardware Holdings, Inc (NYSE:RH) is hurting Ethan Allen. Online retailer Wayfair Inc (NYSE:W) looks like a formidable rival as well. But if Ethan Allen’s new products start gaining some acceptance — backed by the higher marketing spend that is hitting margins at the moment — Ethan Allen could go back to being a fearsome competitor itself.

Ethan Allen is having some growing pains at the moment, but if the strategy is viable long-term, there’s reason to see some better days ahead. With the stock bouncing recently off a five-year low, more risk-tolerant investors might be willing to give ETH another shot.

Hot Energy Stocks To Buy For 2019: Guess?, Inc.(GES)

Guess?, Inc. (NYSE:GES) was one of the biggest surprises of the first quarter. A blowout first-quarter report sent GES shares up 28%, and the run didn’t end there. GES shares now have gained over 50% so far this year and have nearly tripled from an 11-year low reached last year.

Even after the gains, there’s still a case for more upside, however. GES has managed to minimize its exposure to the more difficult and more competitive U.S. market. Instead, it’s focused its investments on Europe and Asia — and is having significant success in both regions. Asia, in particular, represents a real long-term opportunity — but drove just 7% of operating earnings in fiscal 2018 (ending January).

The balance sheet remains pristine, with almost zero debt and nearly $4 per share in net cash — about 15% of the company’s market capitalization. Backing out that cash, GES is trading at 24x FY19 consensus EPS estimates.

That’s a big multiple in the world of retail these days — and might scare off some investors. But margins remain thin, and Guess? is in the early stages of a turnaround. With GES still yielding 3.5%, income investors looking for growth could see the stock as a worthy choice.

Hot Energy Stocks To Buy For 2019: Taiwan Semiconductor Manufacturing Company Ltd.(TSM)

My pick is chip-manufacturing giant Taiwan Semiconductor Manufacturing Company. TSMC is the largest contract chip-manufacturing company in the world and provides manufacturing services to a wide range of customers serving an even wider range of markets, from the maturing mobile processor market to the fast-growing artificial intelligence chip markets.

The company’s shares recently came under pressure after it provided financial guidance for the second quarter that was below analyst expectations, thanks to a slowdown in mobile processors — though that weakness was partially offset by shipment strength in cryptocurrency chip shipments. In the near term, it’ll be tough for TSMC to make up for the weakness in mobile processors, as TSMC isn’t immune to broader market trends and the smartphone market is under pressure. Over the long term, however, I think things look good for the company.

For example, as artificial intelligence chip shipments grow, TSMC is poised to benefit, as it’s the go-to contract chip manufacturer for virtually all of the small and large players here. Moreover, while smartphone unit shipments are proving to be a bit of a letdown, smartphones keep getting more complex — which means that the chips inside of them get more complex, a trend that benefits TSMC.

Moreover, TSMC is a reasonably cheap stock, trading at less than 18 times trailing-12-month earnings. Considering that the company’s long-term growth prospects look bright and its position in the markets that it serves is strong and seemingly getting stronger, this is a chip stock that I think investors should seriously consider for their portfolios.

Hot Energy Stocks To Buy For 2019: NutriSystem Inc(NTRI)

Shares of NutriSystem Inc. (NASDAQ:NTRI) plunged after Q1 earnings in February. The company pulled down full-year guidance after admitting that it had erred with its advertising strategy for the key diet season at the beginning of the year.

I was long shares of NTRI heading into the report — and as I wrote at the time, I averaged downon my position after the post-earnings plunge. This is a company that has been growing nicely for several years — and still has a nice growth runway ahead.

A solid Q1 did send NTRI higher, but I believe there’s still more upside from a current price near $33. The company still has about $2.50 per share in cash – and no debt. It yields 3%. And the midpoint of 2018 guidance suggests a P/E around 16x, and under 15x backing out the company’s cash.

That’s a multiple that suggests Nutrisystem’s growth has come to an end – but I don’t believe that will be the case. The core Nutrisystem business isn’t performing as poorly as management feared, and will have plenty of room for a rebound in 2019. South Beach Diet, acquired for a pittance, is growing like gangbusters and should become a material contributor to profit next year as well.

This a stock that received a P/E well north of 20x just a few months ago because investors believed it had years of growth ahead of it. One poor diet season — with fixable mistakes already addressed by management — shouldn’t change that outlook.

If Nutrisystem is back on track, and get back near that multiple, there’s a case for NTRI to double over the next couple of years.

Hot Energy Stocks To Buy For 2019: Sogou Inc.(SOGO)

Sogou controls about 4% of the online search market in China, according to StatCounter, making it the country’s fourth-largest search engine after Baidu, Alibaba’s Shenma, and Qihoo 360’s Haosou — in that order. Sogou claims, based on iResearch’s numbers, that it’s the "second largest search engine by mobile queries in China" with a market share of 17% last year.

Sohu, one of China’s oldest internet companies, spun off Sogou in an IPO last November. Sohu retains the largest stake in Sogou, followed by Tencent. Tencent owns WeChat, the top mobile messaging app in China with nearly a billion monthly active users worldwide.

On its own, Sogou seems like a weak investment. But with its integration into WeChat’s ecosystem and Tencent’s QQ browser (which controls 11% of China’s mobile browser market), Sogou might stand a chance against Baidu.

Sogou currently trades about 35% below its IPO price of $13 per share, due to concerns about its sales growth, tough competition, and trade tensions with China. Yet only four analysts currently follow Sogou. On average, those analysts expect Sogou’s revenue and earnings to grow 37% and 35%, respectively, this year.

Those are robust growth figures for a stock that trades at 22 times forward earnings. By comparison, Baidu trades at 25 times forward earnings, and analysts expect its revenue to rise just 17% this year as its earnings slip 7% on higher investments. Therefore, Sogou might be a hidden gem in China’s crowded tech sector.

Hot Oil Stocks To Invest In 2019

Cryptocurrencies are still a hot ticket. Though they’ve fallen a long way from December’s peaks, bitcoin prices are still up 588% over the last year and Ethereum has gained 1,108% over the same period.

That high-adrenaline thrill ride appeals to some investors, while others see doom in unstable cryptocurrency prices and uncertainty about which coins to follow and which should be ignored. So we asked a few of your fellow investors here at The Motley Fool for some calmer investment ideas that still pack a tremendous growth punch.

Read on to see why you should forget about bitcoin and Ethereum in favor of following stocks, at least when it comes to serious investments for the long term.

Hot Oil Stocks To Invest In 2019: NutriSystem Inc(NTRI)

Weight management services provider NutriSystem Inc. (NASDAQ:NTRI) used to be a big growth company with 20%-plus revenue growth and healthy long-term margin drivers.

But NTRI botched the start of the 2018 Diet Season, largely due to complacency in the video ad campaign and lack of innovation in the product pipeline. Consequently, revenue and margin growth to the start the year slipped into negative territory, and NTRI stock dropped.

But the company’s first quarter numbers were actually much better than expected, and illustrated that early 2018 headwinds are now largely in the rear-view mirror. Consequently, the longer-term growth narrative in now coming back into focus, and that narrative is largely positive considering secular tailwinds in healthy eating and active lifestyles remain as strong as ever.

With that longer-term narrative back in focus, NTRI stock looks dirt cheap here and now. This is a double-digit revenue growth company with healthy margin drivers, the sum of which should drive nearly 20% earnings growth over the next 5 years. NTRI stock trades at just 16-times forward earnings, which is dirt cheap for 20% earnings growth.

Also, NTRI stock usually trades at 23.5-times forward earnings. Thus, today’s 16-times multiple is a pretty steep 30% discount to “normal”.

NTRI stock did bounce back above $30 following the company’s strong Q1 report. But there is a strong argument for why this stock should head to $40 and up in a hurry, considering the strong growth prospects and still discounted valuation. As such, this is one of the best cheap stocks to buy.

Hot Oil Stocks To Invest In 2019: Lennar Corp.(LEN)

 This Miami-based homebuilder is off nearly 7% this year, creating an ideal buying opportunity for long-term investors.

Boasting a market cap of over $14 billion, the company suffered a pre-tax litigation loss of $140 million, and earnings were about $0.50 lower per share year-over-year in fiscal 2017.

However, growth metrics remained very bullish with deliveries up 11%, new orders up 11%, and revenues jumping 15% in the same time frame.

I am also very excited about the CalAtlantic strategic move.

Lennar CEO Stuart Miller bullishly proclaimed, "Our company is very well positioned for future growth, and we look forward to another strong year in 2018. Our pending strategic combination with CalAtlantic, which is scheduled to close on February 12, 2018, will add to the future growth of our company as we strategically combine two great companies in markets that we know well with products that we know well, to create the leading homebuilder in the country."

Hot Oil Stocks To Invest In 2019: Paychex Inc.(PAYX)

Fundamentals aside, Paychex, Inc. (NASDAQ:PAYX) simply seems like a good stock. The second-largest payroll processing company in the U.S. has a solid moat – and its business model creates high switching costs. Paychex is simply embedded in its customers’ businesses — and given the growth in small and medium businesses of late, that seems like a good thing long-term.

There is a risk of disruption here. Software provider Workday Inc (NASDAQ:WDAY) represents a potential threat, though Paychex is developing its own products to fight back. A macro downturn could hit the stock, though the company managed through the 2008-09 financial crisis reasonably well.

PAYX isn’t necessarily cheap, either, at 23x forward earnings. But this is a case of paying for quality, as Will Healy argued last month. And a 3.1% dividend yield makes the stock attractive to income investors as well.

PAYX probably isn’t going to bring in huge rewards, but for patient long-term investors, it looks like an intriguing choice.

Hot Oil Stocks To Invest In 2019: Yamana Gold Inc.(AUY)

No gold stocks to buy list is complete without mentioning at least one speculative name: just the fact that you’re interested in gold means you’re probably willing to stomach some risk. My best gamble in this sector? I’m going to go with Yamana Gold Inc. (NYSE:AUY).

A few years back, AUY was one of the top gold stocks by market capitalization. It’s still a highly respected name, but the company lost a significant amount of its luster. On a YTD basis, AUY shed more than 11%. Over the last five years, the company hemorrhaged a devastating 78.5%.

Looking at its financials, you can see why investors have run for the exits. Revenues have been stagnant in a deflating sector, leading to sharp earnings losses. Unlike other companies, AUY hasn’t improved its balance sheet, and its free cash flow is a mess.

On the flipside, management has expended significant effort curbing operating expenses. Subsequently, its earnings, while negative, are substantially paring losses. With enough time, AUY could potentially turn the ship around.

How likely is this scenario? I’m not sure, which is the gamble. However, gold sentiment overall is positive, and will probably continue improving. Also, for what it’s worth, seasonality trends are favorable.

It’s a long shot, but AUY has the right stuff to surprise!

Hot Oil Stocks To Invest In 2019: 3M Company(MMM)

3M MMM stock

Source: Dean Hochman via Flickr (Modified)

 

IN April, I included 3M Co (NYSE:MMM) in my list of seven stocks that are great stocks and great businesses.

Over the past decade, 3M stock has delivered an annualized total return for shareholders of 11.7%. For comparison, General Electric Company (NYSE:GE) delivered -4.1% for its shareholders over the same period — a record I’m sure leaves it at the bottom of S&P 500stocks.

So, why did MMM lose more than 10% in April? InvestorPlace’s Bret Kenwell can explain. Kenwell wrote on April 25:

“When the stock market’s not in a good mood, missing earnings and coming up short on guidance — no matter how much the stock has already suffered — is a recipe for disaster. From the midpoint of management’s outlook, 3M now expects earnings per share of $10.37 vs. $10.45 in the prior outlook and organic sales growth of 3.5% rather than 4%.”

With most companies hitting earnings out of the park in a trading environment in which investors don’t seem to care about earnings beats, to miss earnings is inexcusable.

As Kenwell suggests, 3M is in a funk, which makes it a great time to buy its stock in my opinion.