With summer coming to an end, investors may want to target certain compelling stocks to buy now. Basically, the theory is the reverse of the adage, sell in May and go away. Those who did sell in May are now returning from their summer vacations and getting back to work. Further, with traders bidding up the hottest flavors of the week in the technology space, several opportunities exist that are simply overlooked – for now.
With thousands of publicly traded companies listed on major U.S. exchanges, it’s practically impossible to keep track of all of them with the same care and attention. That just makes the stock picks below all the more enticing.
Home Depot (HD)
An icon in the home improvement retail space, Home Depot (NYSE:HD) is a reliable everyday performer. However, it’s only up a bit over 2% since the Jan. opener. Likely, investors are focused on the hottest technology plays, thereby providing little attention to HD. Still, in the past six months, HD gained a hair over 9%. With shares down 2% in the trailing 30 days, this might be one of the stocks to buy now.
Financially, you’re looking at a consistent growth and profitability machine. On the top line, Home Depot prints a three-year revenue growth rate (per-share basis) of 15.2%, beating out 76.39% of its peers. Also during the same period, its EBITDA growth rate pops at 16.7%, above 65%. Lastly, the company runs a trailing-year operating margin of 14.88%, outflanking 87.67% of the competition.
Notably, analysts peg HD as a consensus moderate buy. Their average price target lands at $342.48, implying a bit over 6% upside potential.
Headquartered in Mason, Ohio, Cintas (NASDAQ:CTAS) provides a range of products and services to its enterprise-level clients. These include uniforms, mats, cleaning supplies, and safety products such as fire extinguishers and testing equipment. It’s a vital cog of the broader infrastructure and investors recognize this fact. Since the start of the year, CTAS gained more than 10% of its equity value.
Still, there could be more upside here, making CTAS one of the stocks to buy now. Financially, as with Home Depot above, it’s not a sexy business but it gets the job done with consistently solid sales growth and profitability. For example, its three-year revenue growth rate pings at 8.8%, above nearly 64% of its peers. And it features an operating margin of 20.45%, above 85.45%.
Significantly, analysts regard CTAS as one of the viable stock picks, pegging it as a moderate buy. Moreover, their average price target comes in at $531.08, implying 7% upside potential.
Tractor Supply (TSCO)
Founded in 1938, Tractor Supply (NASDAQ:TSCO) is a retail chain that sells products for home improvement, agriculture, lawn/garden maintenance, livestock, equine and pet care for recreational farmers and ranchers. As well, the company serves pet owners and landowners. Naturally, Tractor Supply represents a critical partner for the future of U.S. agriculture. Therefore, it should make a great case for stocks to buy now.
To be fair, since the start of the year, TSCO slipped more than 4%. However, this might be a temporary rough patch. For example, in the trailing one-year period, TSCO is up nearly 12%. More importantly, against a financial framework, Tractor Supply prints a three-year revenue growth rate of 22.3%, above 83.94% of its peers. In addition, its EBITDA growth rate during the same period clocks in at an impressive 26.8%. And it’s consistently profitable year in and year out. Lastly, analysts peg TSCO as a moderate buy. Their average price target hits $244.33, implying over 14% upside potential.
Unlike the other stock picks on this write-up, AbbVie (NYSE:ABBV) in my opinion doesn’t have a sense of urgency per se. Don’t get me wrong: As a compelling and relevant pharmaceutical giant, ABBV makes sense no matter what. Plus, the company features a dividend yield of 3.98% per TipRanks, which is well above the healthcare sector’s average yield of 1.5%.
However, ABBV slipped almost 10% since the start of the year. In the past 365 days, shares gained under 8%, which seems overly pessimistic. With AbbVie acquiring Allergan (and thus the Botox unit), the pharmaceutical firm enjoys a gargantuan total addressable market.
Basically, the looks-oriented (I don’t want to say superficial but I’m thinking it) demographics of Millennials and Generation Z will eventually get older. With no safe spaces protecting them from the aging process, Botox could be a powerful coping mechanism. Yeah, it’s awfully cynical but potentially viable. Anyways, I’m not sure if analysts agree but they peg ABBV as a moderate buy. With an implied growth of nearly 17%, it’s one of the stocks to buy now (if you want).
Ulta Beauty (ULTA)
An American chain of beauty stores, Ulta Beauty (NASDAQ:ULTA) just released its fiscal second-quarter earnings report. Per Barron’s, the company posted earnings per share of $6.02 on revenue of $2.53 billion. In contrast, analysts surveyed by FactSet anticipated the company to post EPS of $5.85 on sales of $2.5 billion. So, a top-and-bottom beat should make ULTA one of the top stock picks, right?
Well, the market had other ideas. On the day of the disclosure, ULTA fell nearly 4%. And in the after-hours session, it gained just a tenth of a percent. What the flappity is all this? Honestly, I’m not sure if any analyst provided an explanation. Management noted – through data of course – that it’s essentially a recession-resistant business. Maybe investors are skeptical about that.
For me, social normalization trends – particularly the return to the office – bode well for ULTA. In my view, it’s one of the stocks to buy now on the weakness. Overall, analysts view ULTA as a moderate buy. Their average price target of $532.89 implies nearly 31% growth.
With the last two stock picks, I’m going to dial up the risk-reward profile, beginning with Paycom (NYSE:PAYC). Based in Oklahoma City, Oklahoma, Paycom is an online payroll and human resource technology provider. Per its public profile, the company is one of the pioneering fully online payroll providers. It’s also one of the fastest-growing firms.
Unfortunately, this status hasn’t impressed Wall Street this year. Since the Jan. opener, shares have been all over the map, presently down 6%. Over the past 365 days, PAYC slipped almost 21%. However, investors may be too pessimistic. For one thing, the company benefits from a strong balance sheet, especially its cash-to-debt ratio of 18.5x. Operationally, Paycom prints a three-year revenue growth rate of 23.2%, above 78.47% of its peers. And it’s consistently profitable with a net margin of 20.3%.
Turning to Wall Street, analysts view PAYC as a strong buy. Their average price target clocks in at $384.27, implying over 34% upside potential.
Based in San Diego, California, ResMed (NYSE:RMD) is a medical equipment company. Per its corporate profile, ResMed provides cloud-connectable medical devices for the treatment of sleep apnea, chronic obstructive pulmonary disease, and other respiratory conditions. However, investors are extremely skeptical about RMD. Since the beginning of the year, shares fell 23%.
Granted, I understand the risky and often volatile nature of the medical equipment industry. At the same time, the global sleep apnea devices market may be worth about $5.8 billion this year. Further, experts project that the sector could hit $8 billion by 2028, representing a CAGR of 6.5%.
Also, ResMed enjoys a solid growth machine. Specifically, its three-year sales expansion rate hit 12.2%, above 63.21% of its peers. Plus, it’s consistently profitable, leveraging a net margin of 21.25%. Looking to the Street, analysts peg RMD as a strong buy. Their average price target stands at $249.60, implying 55% upside potential.
On the date of publication, Josh Enomoto 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.