The first half of the trading year is in the books, and by all accounts, it was a resounding success. The benchmark S&P 500 index rose 15% from January through the end of June, hitting all-time highs on 31 separate occasions. Market analyst Charlie Bilello notes that, at 5,460, the S&P 500 ended the first half of 2024 above every single year-end price target on Wall Street.
The takeaway is that this market has defied expectations and in a big way. While it’s hard to know where the market will go in the year’s second half, some stocks look like good bets as we head into July. A number of stocks are benefitting from positive catalysts and appear to have momentum as we make our way through the summer months and the year’s third quarter. Here are the seven best stocks to buy in July 2024.
Rivian Automotive (RIVN)
Shares of Rivian Automotive (NASDAQ:RIVN) are in full recovery mode after it was announced that German automotive giant Volkswagen (ETR:VOW3) is investing $5 billion in the electric vehicle start-up company. Volkswagen’s investment includes an initial injection of $1 billion. The additional $4 billion will be allocated to Rivian in stages through 2026. The investment creates a joint venture between VW and Rivian to see the two automakers work on electrical architecture and software technology.
Shares of Rivian soared 35% on news of the Volkswagen investment. The cash infusion from Volkswagen could not have come at a better time, as Rivian’s stock had been under pressure this year due to the company’s cash burn and mounting losses. The electric vehicle maker reported a net loss of $1.45 billion in the first quarter of 2024. While RIVN stock is now on the rise, it remains down 30% this year, suggesting that there is an opportunity for investors to take a stake and ride the share price higher.
Amazon (AMZN)
For the first time, E-commerce giant Amazon’s (NASDAQ:AMZN) market capitalization has just surpassed $2 trillion. The company achieved the milestone as its stock finished trading on June 26 at $193.61 per share. Since then, AMZN stock has risen further, nearly above $200 a share. The company’s stock has increased more than 30% this year, with analysts seeing more upside ahead and rating the stock as a “strong buy.”
Amazon’s stock has been rising due to strong first-quarter financial results that showed the company’s dominant cloud computing business was recovering after businesses cut back their spending during the pandemic. Earnings and share price are also benefitting from cost-cutting initiatives undertaken over the last two years. It has taken Amazon four years to go from a $1 trillion market valuation to $2 trillion. The median price target on the stock suggests a further 12% upside from current levels.
Federal Express (FDX)
A turnaround in FedEx’s stock (NYSE:FDX) also looks to be underway after the shipping and logistics company reported financial results that beat analyst forecasts and raised its forward guidance. FDX stock has gained 20% in the past month after the company announced EPS of $5.41 versus the $5.35 that was expected. Revenue totaled $22.11 billion compared to $22.07 billion that was estimated on Wall Street.
The strong results at FedEx come as the company implements cost-cutting measures as part of a plan to save $4 billion by the end of the 2025 fiscal year. Regarding guidance, FedEx raised the outlook for its current year, saying it expects low to mid-single-digit revenue growth mainly driven by e-commerce. Also in June, FedEx raised its quarterly dividend payment to shareholders by 10%, taking the distribution to $1.38 per share and giving the stock a yield of 1.85%.
FDX stock is up 18% this year.
Novo Nordisk (NVO)
Now would be an opportune time to take a position in pharmaceutical company Novo Nordisk (NYSE:NVO) after the company’s popular weight loss drug “Wegovy” was approved for use in China, the world’s second largest economy with a population of 1.4 billion people. China’s National Medical Products Administration has approved the weekly injectable drug, noting that half of China’s population is considered overweight.
Wegovy will initially be available to people in China with a body mass index indicating obesity. Novo Nordisk’s Ozempic diabetes medication was approved for use in China in 2021, and that drug’s sales doubled in the country last year. Novo Nordisk struggled to keep up with the surging demand for its weight loss drugs before China’s approval. To help ensure it can meet future demand, Novo Nordisk has announced that it is spending $4.1 billion to expand its manufacturing capacity in the U.S.
NVO stock has risen 40% in 2024 and is up 80% over the last 12 months.
Chipotle Mexican Grill (CMG)
Shares of Chipotle Mexican Grill (NYSE:CMG) have pulled back 7% since the company enacted a 50-for-1 stock split on June 26. Investors may want to take advantage and buy the dip in this leading restaurant stock. The recent stock split was the first ever for Chipotle and lowered the share price from over $3,200 to less than $65. With the post-split decline, CMG stock trades around $61 per share.
This is the most affordable Chipotle stock in more than a decade, and the current pullback is unlikely to last long. CMG stock has been a long-term winner, having risen more than 300% in the last five years. The company has consistently posted strong same-store sales and grown its retail network. In this year’s first quarter, Chipotle reported that its sales rose 14% year-over-year while its net income increased 20%.
Heico (HEI)
Aircraft parts manufacturer Heico (NYSE:HEI) has raised its dividend payment by 10%. In the future, the Hollywood, Florida-based company will pay a distribution of 11 cents per share, up from 10 cents a share previously. Heico pays its dividend to shareholders semi-annually (twice a year). The new dividend will be paid on July 15. Heico has consistently paid its semi-annual dividend since 1979.
The dividend hike comes as the company’s stock has been on an upswing. Heico, which primarily makes replacement parts for commercial and military aircraft in the U.S., has seen its share price increase 25% since the beginning of 2024. The company also manufactures some medical and telecommunications equipment, though aircraft parts are its main business. Strong earnings and a near monopoly over commercial aircraft components have increased HEI stock.
Occidental Petroleum (OXY)
Is oil producer Occidental Petroleum (NYSE:OXY) one of July’s best stocks to buy? Warren Buffett seems to think so. Buffett’s holding company, Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B), continues buying OXY stock. In mid-June, Berkshire bought Occidental Petroleum shares for nine consecutive days, pushing his ownership stake to nearly 30%. Buffett now owns more than 255 million shares of OXY stock worth just under $16 billion.
Buffett buys more stock every time the share price falls below $60. With OXY stock down 13% from its 52-week high of $71.18 in April, Buffett has been buying hand over fist. Beyond Buffett, now is also a good time to purchase Occidental Petroleum stock as crude oil prices rise along with summer demand. West Texas Intermediate (NYSE:WTI) crude oil, the U.S. standard, is trading at $83 a barrel, up from less than $75 per barrel this spring. Some analysts see crude prices topping $90 this year.
OXY stock has risen 5% over the last 12 months.
On the date of publication, Joel Baglole 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
