5 Stocks to Buy Now - August 2023

Top 5 Stocks to Buy NOW – August 2023

The stock market is going through a rough patch right now. The 2023 rally seems to have hit a snag, especially with Apple’s earnings not meeting expectations. I guess sometimes the Apple does fall far from the tree. Even though Apple’s performance was surprising, AI stocks had their moment of glory but are now facing a downturn.


It’s clear the good times have taken a pause. The S&P 500 is down about 5% from its high, and the Nasdaq is nearing an 8% drop. The numbers don’t look great, but despite this, I think there are five stocks out there that are solid buys for the future. If you like this kind of info, don’t forget to subscribe.


With the way the market is now, it’s super important to stick to your game plan. Don’t buy or sell just because everyone else is. It’s always easier to give advice than to take it, right? Even the ideas I’m about to share with you should be taken with a grain of salt. They’re my ideas. That doesn’t mean they need to be your ideas. Always DYOR (do your own research)!


There’s a lot of talk about a possible recession in 2023 or 2024, and other concerns like inflation. It’s a noisy time in the market, but I put in the work to understand the companies we talk about. Over in the Stock Dads Discord, we always say: learn first. In our Stock Dad’s Discord Group, we help people understand trading and investing. I’m pretty confident about the five stocks I’ll share, and they could grow anywhere from 30% to 100% in the next few months and years, but let’s look at the numbers before jumping to conclusions.

Spotlight Stock #1: ALB

EV Play

First up is ALB Stock, also known as Albemarle Corporation. They’re the only company in the U.S. making lithium and are the biggest lithium producer in the world. Why does that matter? Well, lithium is what goes into electric vehicle (EV) batteries, and those are becoming a big deal.


The EV market is heating up. Sales have grown about 40% this year, and it’s expected to keep going up. More EVs mean more demand for lithium. Over the last few years, the price of lithium has gone up a lot. Research says the demand for lithium will be way more than the supply. This could mean prices will keep going up.


Some people worry about a possible recession and if people will keep buying new cars. However, looking at what ALB is planning, things seem promising. They think they can make 20% to 30% more lithium every year for the next few years. They’re also getting more involved in lithium mining. And they recently reported a 60% growth in revenue and more than 100% growth in net income. Those are big numbers that shouldn’t be ignored.


ALB Stock: A Sound Investment

ALB has recently raised their profit outlook for the year, a sign of strong performance. With its current P/E ratio sitting at five, it’s trading far below the market and its historical averages. Such a low P/E ratio, especially when we expect future growth in earnings, presents an enticing buy. As Wall Street seems to overlook ALB, the stock’s value proposition only becomes more attractive. With their increasing cash reserves, there’s potential for higher dividends and share buybacks—something management is keenly aware of as they prioritize shareholder returns.


If you’re looking for an opportunity to jump in at what seems like a discounted price, ALB might just be it. Additionally, it fits the bill if you’re in the market for a materials company stock.

Spotlight Stock #2: AMD “The Sleeping Giant”

Semiconductor Potential

Next up, we have AMD (Advanced Micro Devices). This semiconductor company appears to be a dormant powerhouse, poised for significant growth in the upcoming months. AMD’s products are diverse, finding applications in PCs, gaming, data centers, and automobiles. Despite their recent earnings report showing a 20% YoY revenue drop and PC sales halving, the company remains optimistic. They believe they’ve hit rock-bottom in PC sales, projecting growth in the next quarter—a sentiment echoed by their competitor, Intel.


Now might be the opportune moment to invest in AMD, especially given the current subdued investor confidence. A silver lining is visible on the horizon with significant catalysts expected in the upcoming quarters.


AI Super Chip Rollout

Arguably the most exciting development for AMD will be later this year when they introduce their AI super chip, a direct competitor to Nvidia’s offerings. The AI chip market is currently characterized by overwhelming demand, constrained mainly by supply issues. AMD’s entry promises not only to fill this demand-supply gap but also to substantially boost their sales and profitability. Recent announcements indicate a sevenfold surge in client interest in AI chips. Given the high demand, AMD stands to benefit considerably.


The current analyst price targets for AMD hover around $145 per share. With its forward P/E ratio in the 30s and the stock price nearing 100, every dip seems to present a more compelling buying opportunity. If you can muster the patience, holding on to this stock could pay off generously in the future.


Just wait until you get to #5!

Liking these stock insights? Keep reading! I assure you, stock number five in our list will be a game-changer.

Spotlight Stock #3: OD

Untapped AI Potential

Continuing with our list, let’s explore Oddity Tech (OD stock). Fresh from its IPO, OD stock remains largely off the radar for most, creating an environment of untapped potential. Despite displaying promising results, the stock is still underrated and is gradually approaching its IPO price. Now is an opportune time to initiate a position and grow it as the company evolves.


Artificial Intelligence at Its Core

While its name may suggest otherwise, Oddity Tech is deeply rooted in artificial intelligence. The company harnesses AI capabilities to innovate within the beauty and wellness sectors. With a user base of 40 million, they’ve amassed significant data to fine-tune and develop new products. Impressively, 40% of their workforce is dedicated to tech roles. They also boast a biotech lab in Boston, vital for pioneering new product ingredients.


The company operates in two distinct segments: IL Makiage (their makeup line) and Spoiled Child (a wellness division focused on supplements). On a personal note, I’ve even invested in their collagen product. Here’s hoping it works its magic on my skin!


Financial Highlights

One of the standout features of Oddity Tech is its profitability. Contrary to several other AI stocks, Oddity Tech has consistently posted profits for the past years, all while maintaining a blistering growth rate of 100%. Their bullish outlook for the year is evident with their revised upwards forecast. Their financial health is commendable—pre-IPO, they sat on a $100 million cash reserve with zero debt. Post-IPO, they managed to secure an additional $400 million.


The significant cash reserve positions them well for reinvestments into the business, and their consistent focus on profitability suggests a promising future for investors seeking both growth and profits.


Proceed with Caution

With any new IPO stock comes inherent risks. The potential for insider selling and the absence of a lengthy public financial track record can cause volatility. My recommendation would be to begin with a conservative investment, then incrementally increase your stake as more financial data becomes available, boosting investor confidence.


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Spotlight Stock #4: VZ

A Steady Bet

Moving on, our fourth stock recommendation is Verizon. Commonly labeled as a “boring” stock, Verizon is a household name with millions of users. It might not be the trendiest growth company, but it has its unique merits.


The Dividend Appeal

The main allure of Verizon lies in its dividend yield, currently sitting at an impressive 8%. This yield is among the highest in the company’s history, and such a yield is a rarity in the market. Understandably, high dividends often raise eyebrows; is it a trap? Are they facing bankruptcy? Despite these concerns, Verizon’s financial health suggests a different story. Recent reports indicate $8 billion in free cash flow over six months, with $5.5 billion paid out as dividends. This leaves a reassuring financial cushion.


Valuation Insights

While telecommunications giants like Verizon and AT&T aren’t celebrated for their rapid growth, they make up for it in other areas. Currently, Verizon’s valuation is quite attractive. Its present PE ratio hovers around six, notably lower than its historical average of eleven. Other metrics, such as total enterprise value over revenue, are also about 30% below their historical norms.


Potential Concerns

However, no stock recommendation is complete without addressing potential risks. A recent Wall Street Journal report highlighted concerns about lead contamination in Verizon’s cables. The financial implications of this remain uncertain. Yet, early assessments from analysts and news sources suggest Verizon might not bear significant liability.


Make Money While You Sleep

For those seeking passive income, Verizon offers an entry at a favorable price. In a turbulent market, it even showcased a growth of 5% in the past month, indicating its defensive nature. To sum it up, with its value and dividend attributes, investing in Verizon means letting your money work for you.

Spotlight Stock #4: PERI

Perion Network

Any long-term Stock Dads followers may be able to guess the fifth stock on our list, Perion Network. It might just be the most lucrative hidden gem on the list.


Company Overview

Perion Network is a $1.5 billion ad technology powerhouse. It’s been earning its label as a growth stock by boosting its revenue consistently by over 20% over the past few years. What’s even more impressive? The company’s net income growth, which has ranged from 50% to 100%. In the most recent quarter, they didn’t just meet expectations; they surpassed them and even increased their guidance by 5% for the upcoming year.


Business Model: Search and Display

Diving into the specifics, Perion divides its expertise between search advertising and display advertising. The latter includes ads you might come across on videos or platforms like Roku. For instance, those user-friendly QR code ads where you scan and get taken straight to a purchase page? That’s them. This feature is something many retailers are finding very useful.


Partnerships and Collaborations

Their partnership portfolio is robust, with big names like Beyond Meat, Walmart, and Albertsons in the mix. Their hard work hasn’t gone unnoticed either; they recently bagged an award for their excellence. But it doesn’t end there. On the search side of their business, they’ve allied with Microsoft Bing, a heavyweight in the industry. The increasing focus on Microsoft Bing, especially as it integrates more tools like Chat GPT, is designed to snatch a bigger market share from competitors like Google.


Growth and Financial Health

Digital advertising is on the rise, with the market growing at over 10% annually. Perion isn’t just matching this growth; it’s surpassing it. Their compound annual growth rate for revenue in the past few years stands at an impressive 30%. Even with concerns about a potential recession this year, Perion has shown resilience with a 20% growth rate in the recent quarter. And when it comes to measuring profitability, their adjusted EBITDA has seen a rise of 45% in just the last quarter.


For those keeping an eye on numbers, Perion’s PE ratio stands at about 15, making it an attractive buy compared to other companies in the same sector. They’ve been in the green for many years and have continued to make smart business moves. Following their strong performance in the last quarter, they’re now looking at an even brighter 2023.


Investment Perspective

To top it all off, Perion’s balance sheet is strong. With over $480 million in net cash and no debts, they’re in a prime position to make acquisitions, something they’ve done successfully in the past. The cash they’re holding, nearly a third of the company’s entire valuation, suggests they might be even more undervalued than many think.


For me, it holds a significant spot in my stock portfolio. It’s a tech stock that promises growth and delivers on it. Even if the market shows some dips, I’m holding on and even considering buying more.

Let’s Review

1. AMD (Advanced Micro Devices): A technology titan, set to revolutionize the computer and gaming world with its Ryzen and EPYC processors. With the acquisition of Xilinx, AMD is poised to expand its market footprint and diversify its offerings, challenging competitors like Intel.


2. ALB (Albemarle Corporation): A leader in lithium production, is strategically positioned to capitalize on the growing demand for electric vehicles. With its lithium production set to quadruple, it’s expected to cater to the escalating needs of battery producers.


3. ODD (Oddity Tech): An AI-driven company in the beauty and wellness industry, Oddity Tech offers potential untapped growth, especially as it curates products based on vast user data. Despite its nascent stage post-IPO, its profitability sets it apart from typical AI stocks.


4. VZ (Verizon): Renowned telecom giant Verizon offers a stable dividend opportunity, boasting an 8% yield. Despite concerns about growth stagnation, the company’s significant free cash flow and dividend payout display financial prudence. With a PE ratio signaling undervaluation, it stands as a promising value investment.


5. PERI (Perion Network): A hidden gem in the ad tech sector, Perion Network’s consistent growth, strategic partnerships, and solid financial health, including a debt-free balance sheet, mark it as a compelling investment. Its associations with major players, such as Microsoft Bing, position it favorably in the digital advertising realm.


Across these diverse sectors, each stock offers unique investment propositions, from rapid growth potential and technological innovation to solid dividend yields and robust financial health. As markets continually evolve, informed decisions, thorough research, and strategic foresight remain pivotal for investment success.

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