With the start of a new trading month upon us, it is time, once again, to lay out a plan for my potential stock picks. As many of you do the same, I’m sure you have come to the realization that this current market continues to defy a lot of common sense and logic. We have seen companies reporting great figures for the quarter but they suddenly tank while other seemingly weaker players continue to grind higher. It can be difficult to lay out an accurate road map for the month ahead with all these wild gyrations in stock prices taking place. Of course, this is all part of the investment game we play and we must not get shaken out of certain positions even when double digit declines occur in a single day. You all know the names I’m talking about as we have witnessed W.W. Grainger, Inc. (GWW), Altria Group Inc. (MO), Bemis Company, Inc. (BMS), Johnson Controls International plc (JCI) and even long time favorite Starbucks Corporation (SBUX) among others all suffer double digit declines in a single day last month. These declines don’t phase me as I see them as better buying opportunities for some solid, well known dividend paying stocks. With that being said, let’s take a look at the stocks I am considering for the month of August.
First up is a name I bought several months ago and am considering once again, Johnson Controls International plc (JCI). JCI is a solid long term dividend paying industrial that has been lagging a bit post it’s Adient plc (ADNT) spin off and continues to look very good to me at current levels. July was a terrible month for JCI as its stock price lost a lot of ground and is now trading around its 52 week low.
Next, I am looking to add to pharmaceutical giant Pfizer Inc. (PFE). This is a new stock in my portfolio and makes up a very small part of my health sector holdings. I wouldn’t mind boosting my share count should prices remain in the low $30s.
Finally, I am considering a batch stocks that I have not purchased in a while but feel will do well in the third and fourth quarter this year. These are stocks that do most of their business overseas which up until the start of 2017 was a major headwind because of a very strong dollar. Today, this is no longer the case as the dollar has weakened almost every month since the start of the year. A weaker dollar should translate to better earnings reports for the likes of McDonald’s Corporation (MCD), Yum! Brands, Inc. (YUM), V.F. Corporation (VFC), Colgate-Palmolive Company (CL), The Coca-Cola Company (KO), Pepsico, Inc. (PEP), Philip Morris International Inc. (PM), The Procter & Gamble Company (PG) and many more who do a lot of their business overseas. We have already seen a weaker dollar drive up many commodity prices like crude oil, copper and even gold. Should this trend of a weaker dollar persist, I feel we’ll be reading many more very positive earnings reports for the third and fourth quarter from these companies.
What do you think about my potential stock buys for the month of August? Do you think the U.S. dollar will remain weak throughout the second half of the year and potentially impact earnings for many companies in a positive way? Please let me know below.
Disclosure: Long GWW, BMS, JCI, SBUX, ADNT, PFE, MCD, YUM, VFC, CL, KO, PEP, PM, PG