Summer is here and the stock market may be the furthest thing from your mind right now. The beach is calling you, the kids are home from school and maybe you’re traveling for this year’s vacation.
But maybe you should take one last look at Wall Street before you take on the summer. After all, there are a ton of fantastic investment opportunities out there after a few months of swoon stock prices.
Here are five stocks Fool.com contributors have identified as good buys right now.
Think of the snow
Dan Caplinger (Vail Resorts): Early summer may not seem like the best time to think about investing in a ski resort operator, but Vail Resorts (MTN -2.45%) offers potential shareholders a Christmas-like opportunity in July. The company has an impressive portfolio of 40 ski properties in the United States, Canada and Australia, having made serial acquisitions to increase its exposure to key regions such as the North East.
As you’d expect, Vail derives most of its revenue from lift ticket sales, as well as related needs for equipment rentals, ski and snowboard lessons, restaurants, and operations. on-site retail. In her previous role as chief marketing officer, new CEO Kirsten Lynch was instrumental in boosting season pass sales, with the famed Epic Pass becoming increasingly valuable as Vail made acquisitions to expand the range of stations pass holders can visit. Season ticket sales cushion the blow of bad weather, making the business a more reliable generator of revenue and profit.
Vail’s stock has done well in 2021, with investors anticipating a rally as snow enthusiasts hit the slopes. Still, worries about an economic slowdown and the lingering effects of the pandemic on travel have dealt a 40% hit to the stock price since November. It looks like an overreaction. Moreover, with a dividend yield approaching 3.5%, the shares of the ski resort operator offer income as well as growth potential. Vail Resorts might just be a rough black diamond for investors.
Use exaggerated retail market fears to your advantage
Jason Hall (Simon real estate group): Take a quick look at the stock chart of North America’s largest mall owner and I wouldn’t blame you to see a struggling company. Malls have lost their relevance in retail for years and the American consumer is increasingly pressured by inflation. Add to that the steps taken by the Fed to raise interest rates to combat said inflation, and a potential recession is on the table.
Here is the result :
But I think the pendulum swung way too far the other way. Simon Real Estate Groupit is (GPS -2.41%) the properties are not your average low traffic regional mall. It has some of the best Class A shopping centers in the markets it serves and has a thriving and growing upscale retail outlet business. It also has a very strong balance sheet with $8.2 billion in cash and cash that it can access.
The Board of Directors and management demonstrate the health of this company through their actions. For example, the dividend rose 20% in May, after increasing it in each of the previous two quarters. It’s also a lot safer than the 6.8% return would suggest: the $6.80 in annualized dividends is about 58% of the $11.68 in comparable operating funds (FFO) per share that the management expects Simon to win in 2022.
As the market sees a mall owner and fears the worst, I see an opportunity. A yield close to 7%, a growing (and secure) payout and a valuation of less than nine times the comparable 2022 FFO make Simon a bargain today.
Here’s a fantastic growth stock that’s trading at five-year lows
Anders Bylund (Netflix): I can’t promise that netflix (NFLX -1.96%) will blast market expectations in the second quarter report on July 19. However, the digital media streamer’s stock has stabilized at a bargain price, although the long-term growth prospects are brighter than ever. This is a great buying opportunity, and you’ll be sorry you missed it if you sit on the sidelines in July.
Last November, the stock began to decline amid macro concerns and an ever-growing group of direct competitors. The decline accelerated in January and April as Netflix lost a few thousand subscribers and released subscriber forecasts below Wall Street expectations. The stock is trading near its lowest level in five years due to slowing subscriber growth.
At the same time, Netflix is shifting its business focus from maximum subscriber growth at all costs to sustainable profits. Sales have nearly tripled in five years, while profits have soared 780%. Meanwhile, the stock has returned to prices last seen in the fall of 2017:
And don’t forget that business is changing before our eyes. Netflix will soon add an ad-supported service plan to appeal to the most price-sensitive entertainment consumers. Additionally, the Netflix-owned video game portfolio is growing by leaps and bounds and could become a revenue-generating business over the next two years. That’s just the 10-second elevator pitch for what’s going on in Netflix’s research and development department. The company also has a long history of positive surprises on an unsuspecting world.
If you’re not buying Netflix stock today, I don’t know what the company can do to convince you. This is my best stock to buy today, and it’s not even a close call.
A long-standing game in e-commerce and cloud computing
chris snower (Amazon): Amazon (AMZN -2.49%) really needs no introduction at this point, but investors should know that the company’s e-commerce business is its primary revenue category, while its cloud computing segment, Amazon Web Services (AWS ), is where its profits are made.
The e-commerce segment continues to grow, with sales in its largest region, North America, rising 7.5% in the last quarter to $69.2 billion. Some investors understandably worry about how an economic downturn might affect Amazon, but investors shouldn’t be too worried.
Even as consumers cut back on spending, Amazon’s online store carries almost all the essentials consumers need, which means they are unlikely to stop ordering from Amazon even if they have to. reduce other expenses.
Investors should also take note of Amazon’s incredibly profitable AWS business. Not only did AWS revenue jump 36% to $18.4 billion in the last quarter, but operating profit also reached $6.5 billion, an impressive increase of more than 56 % year over year.
If there is an economic storm on the horizon, there is no doubt that the company will be able to weather it well. Amazon has proven its resilience during the pandemic by expanding its logistics capabilities and delivery capacity to meet growing demand.
The massive sell-off in the broader market has helped send Amazon’s share price down 37% in the past 12 months, making the e-commerce and cloud computing giant relatively cheap right now. moment.
We still need a lot more storage space
Matt DiLallo (Prology): Shares of the global logistics real estate giant Prologis (PLD -0.56%) fell nearly 30% from their peak. This is due to some scary news from the e-commerce giant Amazon, which has more storage space than it needs these days. For this reason, it plans to offload between 10 million and 30 million square feet of warehouse space.
However, this is a drop in the bucket compared to what is needed to support growing online sales and changing inventory management practices. Based on an estimate by a commercial real estate services company CBREthe global economy needs 1.5 billion square feet of additional warehouse space by 2025.
As a result, aggregate demand should remain strong. This is why Prologis fought for to acquire companion industrial real estate investment company Duke Real Estate. It is paying $26 billion for its next biggest rival in a deal that will boost its presence in the U.S. warehouse market while expanding its development pipeline. The combined company will have enough land to develop 214 million square feet of warehouse space in the future.
Duke Realty also provides Prologis with more integrated benefits. The companies control nearly 1.2 billion square feet of 97.5% leased warehouse space. The rental rates for these contracts are 47% lower than the prevailing market rate. Thus, when they expire, Prologis can capture the higher rents on the market. Add that to its development up and down in the share price, and Prologis looks set to deliver strong total returns in the years to come.