There’s been a lot made of stock prices recently. Much of the chatter has revolved around stock splits and why lower prices make better stocks to buy.
Many of the big tech firms have been doing them. Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOG) are just two recent examples. Their management all seem to say the same: “We are doing the split to provide greater access to a larger group of investors.”
In reality, fractional shares make share prices irrelevant. It doesn’t matter what the price of a stock is. If you like Tesla (NASDAQ:TSLA) at $650 and you only have $100 to invest, you buy 1/6th of a TSLA share.
All seven of these stocks to buy have solid balance sheets and good prospects, and they’re diversified among seven different sectors.
Electronic Arts (EA)
It seems like it’s only a matter of time before Electronic Arts (NASDAQ:EA) gets acquired. It’s big enough to be attractive to large-cap technology and asset management firms but small enough to be easily digestible by its prey.
The video game publisher’s stock did well in May, gaining almost 18% in the month.
Part of its resurgence was due to healthy Q4 2022 numbers, including a 17.5% increase in net bookings during the quarter. However, it also had to do with persistent rumors that its management held buyout meetings with several prominent tech players such as Apple (NASDAQ:AAPL) and Amazon.
Electronic Arts finished Q4 2022 with $3.06 billion in cash and short-term investments and $1.88 billion in long-term debt. That’s net cash of $1.18 billion.
Whenever you’re as big as Nike (NYSE:NKE), you’ve always got a target plastered on your back.
The latest candidate to want to take down the athletic footwear and apparel giant is none other than Adidas (OTCMKTS:ADDYY). Adidas filed a federal lawsuit against Nike on June 10 that claims Nike infringed on nine of Adidas’s fitness app tech patents.
“Adidas claims that the Nike Run Club, Training Club, and SNKRS apps infringe its patents related to features like audio feedback during workouts, GPS tracking, training plans, integration with third-party accessories like heart rate monitors, and the ability to reserve and buy limited-edition sneakers,” The Verge reported.
Adidas wants the courts to force Nike to stop infringing on its nine patents. If Adidas were successful, it would have wide-ranging consequences for Nike and the fitness tracker industry.
Fortunately for Nike shareholders, the company has a sound balance sheet. It finished Q3 2022 (Feb. 28 quarter-end) with $13.47 billion in cash and short-term investments, $9.42 billion in long-term debt, and net cash of $4.05 billion.
Raymond James (RJF)
I spent a couple of years writing about the financial advisor channel in Canada. As a result, much of my time was spent interviewing and speaking with advisors. My view of Raymond James’ (NYSE:RJF) Canadian advisors was highly positive. I doubt it’s much different in the U.S.
On June 1, Raymond James completed its acquisition of TriState Capital Holdings. The $1.1 billion cash-and-stock deal gives Raymond James a bank that serves middle-market businesses and high-net-worth individuals. It does this through TriState Capital Bank and investment management clients through Chartwell TSC Securities.
In the company’s monthly report for April, Raymond James noted that its assets under administration (AUA) for the month increased 5% over April 2021, to $1.18 billion. Unfortunately, due to weak markets, its AUA fell 6% from March 2022.
While business was softer during the month, overall, Raymond James remains rock-solid. At the end of April, it had $5.72 billion in cash and cash equivalents, baking it among the more stable stocks to buy for the long run.
Intuitive Surgical (ISRG)
Like many stocks in 2022, Intuitive Surgical (NASDAQ:ISRG) is down more than 45% year-to-date. Trading $7 from its 52-week low of $188.81, ISRG hasn’t been at these levels since July 2020.
In May, the maker of robotic surgical systems and accessories got some excellent news from the courts.
A U.S. appeals court sided with Intuitive in its two disputes with Johnson & Johnson (NYSE:JNJ) regarding surgical cutting and stapling patents. The fight has been carried on for nearly five years. Were Intuitive to lose these disputes, it would jeopardize the importation of its SureForm staplers and reload cartridges.
Outside the courtroom, Intuitive’s business is still solid.
In Q1 2022, its revenues increased 15% year over year to $1.49 billion. On the bottom line, its non-GAAP net income was down slightly to $413 million from $427 million a year earlier. It finished the quarter with $8.4 billion in cash, zero debt, and net cash of $8.4 billion.
A.O. Smith (AOS)
One of my favorite stocks to buy just got further involved with the water treatment industry in North America.
On June 8, A.O. Smith (NYSE:AOS), which got its start in water heaters many years ago, acquired Florida-based Atlantic Filter Corporation, a manufacturer of water treatment equipment for commercial and residential markets.
“The acquisition of Atlantic Filter further expands our capabilities in Florida and beyond. A. O. Smith is committed to growing our water treatment business as part of our strategy to deliver innovative, differentiated solutions that heat and treat water,” said Kevin J. Wheeler, president and chief executive officer.
The acquisition is the company’s fifth water treatment acquisition since 2016. While the company’s water treatment product sales are low — $56.8 million in the latest quarter — A.O. Smith continues to chip away at this business.
A.O. Smith finished the first quarter with $574.9 million in cash and marketable securities, long-term debt of $288.6 million, and net cash of $286.3 million.
With inflation and food scarcity crushing consumer sentiment globally, this is a business that ought to profit handsomely by helping solve the world’s food crisis.
“We remain excited about what we view to be high-quality characteristics and fundamental improvements that permeate Corteva’s business, not the least of which include its pricing power,” wrote Independent investment management firm Aristotle Capital in its May investor letter.
In Q1 2022, Corteva’s net sales grew 10% year over year to $4.6 billion. Its operating EBITDA increased 15% to $1.04 billion and quarterly sales increased 15% to $2.0 billion. Its crop protection business in North America had a 54% increase in sales during the quarter. They accounted for almost 18% of its global business.
In 2022, it expects sales and operating EBITDA of at least $16.7 billion and $2.8 billion, respectively, which puts it among the best stocks to buy for the long term. It finished the quarter with cash and marketable securities of $2.3 billion, long-term debt of $1.15 billion, and net cash of $1.15 billion.
Until November, Adobe (NASDAQ:ADBE) was on quite the five-year run. In June 2017, its stock was $138. By November 2021, it peaked at $699.54. Down 47% from its November highs, Adobe stock is a much better value today.
However, if analysts are correct, I probably wouldn’t buy until after earnings. Several analysts have recently cut their price targets for the stock. One big concern is that growth from Adobe’s Creative Cloud will slow.
That said, they’re still higher than where it’s currently trading.
Adobe finished the first quarter with cash and marketable securities of $4.70 billion, long-term debt of $3.63 billion, and net cash of $1.07 billion. Its free cash flow remains very healthy at $1.67 billion.
The further Adobe stock falls, the greater the long-term opportunity for investors.
On the date of publication, Will Ashworth 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.