Wall Street has had a rough year so far while the benchmark S&P 500 index has been trading in and out of bear market territory in June. The index is down 19% year-to-date. But perhaps we can turn things around by finding good stocks to buy for July.
Analysts highlight the importance of long-term investing for retail investors. Research from Edward Jones points out: “While valuations have already corrected, the likely necessary process of revising earnings expectations could weigh on sentiment in the months ahead … the pullback is creating compelling opportunities for those with a broader time horizon.”
JPMorgan Chase also says, “While bear marks are certainly painful, enduring them is critical for long-term returns.” However, portfolio positioning that considers risk/return profiles is important for retail investors.
With that said, here are seven great stocks to buy in anticipation for the start of an up move in share value in the coming weeks.
|FBHS||Fortune Brands Home & Security, Inc.||$61.71|
|ZBRA||Zebra Technologies Corporation||$299.34|
Stocks to Buy: DocuSign (DOCU)
In early June, DocuSign reported Q1 FY23 financials. Total revenue was $588.7 million, an increase of 25% from a year ago. Diluted net income per share was 38 cents, compared to 44 cents the prior year. Free cash flow was $174.6 million.
Recently, the company announced an expansion of its strategic partnership with Microsoft (NASDAQ:MSFT). The two will provide new capabilities to enhance customers’ ability to sign and manage documents over the cloud.
DOCU stock is down nearly 60% in 2022. Shares are trading at 37.8times forward earnings and 5.5 times sales. Meanwhile, the 12-month median forecast stands at $73.
Fortune Brands Home & Security (FBHS)
Fortune Brands Home & Security (NYSE:FBHS) manufactures home and security. Its operations are split into three main divisions: Water Innovations, Outdoors & Security, and Cabinets. Among the company’s best-known brands are MasterLock, SentrySafe, and Moen.
In late April, Fortune Brands released Q1 earnings. Sales were $1.9 billion, an increase of 8% from a year ago. Diluted EPS was $1.31, compared to $1.36 the previous year. Free cash flow was an outflow of $235.7 million.
Management also announced it would spin off of its cabinets business, enabling long-term shareholders to hold interests in both enterprises when the new initial public offering happens. The separation is expected to take about a year to complete.
So far in 2022, FBHS stock has dropped over 42%. Forward P/E and P/S numbers are 8.9x and 1x, respectively. The dividend yield is 1.9%. Finally, the 12-month median forecast is at $86.50.
Paychex (NASDAQ:PAYX) is a leading provider of integrated human capital management solutions. One in 12 private sector employee payments goes through Paychex. Its most popular platform is Paychex Flex, which offers HCM solutions in payroll, time, attendance, and benefits.
In late March, Paychex put out Q3 FY22 metrics. Total revenue was $1.28 billion, representing a 15% increase from the previous year. Diluted EPS was $1.15, compared to 96 cents the year before. Cash and equivalents totaled $267.5 million.
The company recently announced 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 in the Paychex platform can contribute to the bottom line.
PAYX stock has declined 14% in 2022 but has gained 4% over the past 12 months. The dividend yield is 2.7%. Shares are trading at 28.9x forward earnings and 9.3x sales. Analysts’ 12-month median forecast stands at $140.
Stocks to Buy: Qorvo (QRVO)
Chip play Qorvo (NASDAQ:QRVO) specializes in high-performance radio frequency solutions for advanced wireless devices and communications. Its portfolio encompasses over 2000 products, including amplifiers, frequency converters, integrated circuits and optical components.
In early May, Qorvo reported Q4 FY22 financial results. Revenue was $1.17 billion, compared to $1.11 billion the year before. Diluted EPS was $3.12, increasing from $2.74 the prior year. FCF was $295.4 million.
The Pentagon recently selected Qorvo to proceed with the Starry Nite program. This program seeks to develop state-of-the-art radio frequency gallium nitride (SOTA RF GaN) foundries to manufacture the 90 nanometer chips for next-generation wireless communications.
QRVO stock has lost around 39% since the beginning of the year. Forward P/E and P/S numbers are 9.2x and 2.3x, respectively. Meanwhile, the 12-month median forecast is at $135.
Teradyne (NASDAQ:TER) builds automation devices for two of manufacturing’s most critical elements, namely task automation and electronic testing.
The task automation segment uses collaborative robotics, while the testing division uses automated testing equipment. High-profile customers include Samsung (OTCMKTS:SSNLF), Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC), Texas Instruments (NASDAQ:TXN) and International Business Machines (NYSE:IBM).
In late April, Teradyne released Q1 earnings. Revenue was $755 million, compared to $782 million the year before. Diluted EPS fell from $1.11 to 98 cents. Cash and equivalents totaled $795 million.
Recently, the company marked the shipment of the 7,000th unit of its J750 semiconductor test platform. The testers include solutions for microcontroller units, wireless devices, and image sensors. Wall Street will be paying a close eye to Teradyne’s Q2 results due in the coming weeks.
TER stock has dropped almost 48% in 2022. Shares are trading at 18.8x forward earnings and 4.5x sales. Finally, the 12-month median forecast stands at $135.
Waters Corporation (WAT)
Waters (NYSE:WAT) manufactures specialty measurement instruments and software for laboratory settings. It markets equipment for disciplines such as chromatography and mass spectrometry. The company maintains 14 manufacturing facilities.
In early May, Waters presented Q1 metrics. Sales for the quarter were $691 million, an increase of 16% in constant currency. Diluted EPS was $2.80, compared to $2.29 the previous 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 10X more sensitive than its predecessor for analyses of challenging molecules.
So far in 2022, WAT stock has declined nearly 10%. Forward P/E and P/S numbers are 25x and 6.6x, respectively. Analysts’ 12-month median forecast is at $350.
Stocks to Buy: Zebra Technologies (ZBRA)
Data management play Zebra Technologies (NASDAQ:ZBRA) focuses on numerous segments that facilitate manufacturing, logistics, retail, and healthcare. Its products and services include barcode scanning, specialty printing, and radio-frequency identification. The company holds over 5,300 patents and has more than 10,000 channel partners.
In early May, Zebra Technologies provided Q1 financials. Net sales totaled $1.43 billion, an increase of 6.3% from a year ago. Diluted EPS was $4.01, down from $4.79 the prior year. Free cash flow was $40 million.
Recently, the company completed its acquisition of 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 enables Zebra to better serve customers wishing to automate their systems.
ZBRA stock has tumbled 49% since the beginning of the year. Shares are trading at 15.3x forward earnings and 2.7x sales. The 12-month median forecast stands at $505.
On the date of publication, Tezcan Gecgil, Ph.D., did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.