A crucial part of stock market investing is picking the right stocks at the right price. Looking at the current market environment, future growth potential, and company fundamentals, here are four stocks you should consider buying in September.
Four stocks to buy in September
When it comes to investing in stocks, depend on a proven strategy, not luck. The key is diversification. Diversify your portfolio in such a way that you hold shares which are inversely proportional to each other. A good mix of growth, dividend, small-cap, large-cap, speculative, and resilient shares can enhance your upside and reduce risk. But limit your diversification to the number of stocks you understand and can monitor.
A large-cap stock in the long-term growth game, with a 25% average annual growth rate, can give your portfolio a boost while incurring little risk. Constellation Software (TSX:CSU) is a lower volatility stock (beta of 0.83) compared to the market (beta of 1.0). Beta measures how much a stock price deviates from the market.
The software umbrella company grows by acquiring small companies ($1 million to $100 million in revenue) across all verticals and geographies. The management’s strategy is to make all-cash deals to limit losses related to the purchase price and protect shareholders from share dilution. Constellation has never engaged in a share buyback or split. Hence, its share price is above $2,000. But the recent dip has pulled the stock down to $1,980. I suggest buying the stock at $1,900 or below as it could rebound to $2,200 and reach a new high during the economic recovery.
Constellation has a relatively lower risk profile compared to other growth stocks and can provide you with 20-30% annual growth. This gives you room to invest a small amount in a high-risk growth stock that can double your money during a growth spurt. One to consider is BlackBerry (TSX:BB)(NYSE:BB), a small-cap tech stock with a beta of 1.21.
The company has experienced revenue losses because its growth driver – the automotive operating system (OS) – is suffering industry-wide weakness. BlackBerry’s automotive OS is powering more than 195,000 vehicles and it has recently secured several orders. But automotive sales have been weak due to chip supply shortages, rising inflation, and the looming recession.
BlackBerry shares fell 44% to $7.6 in the tech stock sell-off. However, its enterprise cybersecurity business, which enjoys stable cash flows, kept the stock above $5. Plus, the stock has shown bouts of 25-30% growth after bottoming out, based on hopes of auto sales recovery.
More automakers are set to release their electric vehicles (EVs) towards the end of this year and next year. BlackBerry will be a key beneficiary of the EV growth trend as many automakers use its OS. As a result, the stock could rebound to $12 (58% growth), so now is a good time to buy at the dip.
When it comes to growth stocks, many investors exit the market when their investments turn red and stay red for a significant period of time. Hence, you need to diversify your portfolio with dividend stocks that can pay you regular passive income irrespective of the stock market momentum.
Enbridge (TSX:ENB)(NYSE:ENB) is a dividend aristocrat that pays quarterly dividends and has a juicy average dividend yield of over 6%. So if you invest $1,000, you will get $60 in dividend income per quarter, which the company could grow by 3-9% annually.
Enbridge is benefitting from changes in the liquefied natural gas (LNG) supply chain. The United States has become the largest exporter of LNG, with the majority of its output going to Europe, and Enbridge is one of the key facilitators. The company is building its LNG export capacity and looks to tap a 30% market share. This opportunity could drive Enbridge stock to new highs.
If you’re looking to place some speculative bets that could grow your money severalfold, you can invest less than $500 in HIVE Blockchain Technologies (TSXV:HIVE)(NASDAQ:HIVE). This crypto mining company is a speculative stock whose price moves alongside Bitcoin prices.
The crypto winter has been frigid, and HIVE’s share price sank by almost 8% on the day after it released quarterly earnings that revealed a deep net loss, although it managed to grow its revenue at a double-digit rate. Unlike some crypto companies that filed for bankruptcy, HIVE is equipped to survive a recession and could grow over 500% in the next crypto bubble. There’s also potential for HIVE stock to grow 50-60% during an economic recovery when Bitcoin prices surge.