The Motley Fool

3 Stocks to Buy for August

Image source: Getty Images.

August is a big month for earnings, and there’s bound to be lots of activity on the markets. Below are three stocks that I expect will have good performances this month that could be great buys today.

Dollarama Inc (TSX:DOL) is my pick for the month and although it doesn’t have earnings coming up, there’s still a lot of reason to expect the stock to rise this month. Despite concerns over growth sinking the stock last year, in 2019, investors have been a lot more bullish on Dollarama.

Up around 50% since the start of the year, the stock has been rallying and is near its 52-week high. There’s been a lot of momentum behind the stock and the real test will come whether the $50 mark will provide resistance or not.

Although it has recently hit $50, the stock hasn’t been able to prove that it can stay above the mark for a prolonged period of time.

However, if it does, we could see the stock break out in a big way. Dollarama is one of the few retailers that can still generate strong same-store sales growth, and with more of a move into Latin America, there could be a lot more growth to come down the road.

Stars Group Inc (TSX:TSGI)(NASDAQ:TSG) reports its earnings in August and a good performance could be what the stock needs to light a fire under its share price.

While we did see some brief excitement around the stock when we learned that Fox would be investing just under 5% in the company, it didn’t prove to be sustainable.

In just one year, Stars Group has lost half of its value. Although the company did have a profitable quarter the last time it released earnings, it has struggled with consistency, recording a loss in two of its past four quarters.

And so if Stars Group can build of its more recent results and demonstrate some more stability, combined with the growth potential that there is for sports betting in the U.S., the stock could quickly become a very hot buy.

Great Canadian Gaming (TSX:GC) has also struggled during the past year, but not to the extent that Stars Group has, declining by just 4%. However, it’s still a far cry from the strong trajectory that the stock was on a couple of years ago.

Concerns related to money laundering in the industry have raised worries about what additional oversight might be added and how that could impact a gaming operator like Great Canadian.

However, the company has shown excellent growth in recent quarters; if it can prove that it is still doing well, it won’t be hard to convince investors what a bargain the stock is.

At a price-to-earnings ratio of just 18, that’s a steal of a deal for the growth potential that Great Canadian still has left. While there’s some uncertainty surrounding the stock, the amount of potential it holds could more than make up for that.

5 Canadian Growth Stocks Under $5

We are giving away a FREE copy of our "5 Small-Cap Canadian Growth Stocks Under $5" report. These are 5 Canadian stocks that we think are screaming buys today.

Get Your Free Report Today

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski owns shares of The Stars Group.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.