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3 Top Stocks to Buy in July and Hold for Long-Term Growth

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Today’s episode of Full Court Finance at Zacks explores where the market stands at the start of July following the worst first half since 1970. Soaring prices, higher interest rates, and recession fears remain the key economic and market worries. The current uncertainty and bearish sentiment from many on Wall Street might offer investors a chance to start positions in fantastic stocks at nice entry points. The three stocks we explore today are Align Technology, Inc. (ALGN), Mastercard (MA), and Intuit (INTU).

The S&P 500 fell roughly 20.5% in the first six months of 2022 despite a nice relief rally in the second to last week of June. The benchmark’s downturn marked its worst first half since 1970 and has left both Wall Street heavyweights and retail investors frustrated and sitting on big losses.

Many pandemic winners have had all of their gains washed away, and even giant companies with great long-term outlooks and amazing balance sheets have been hit hard following the massive bull run after the covid lockdowns. The recalibration of stocks, though painful, presents wonderful opportunities for long-term investors to start buying great stocks at attractive entry points.

Clearly, the near-term future of the economy and the market remains cloudy as the Fed ramps up its rate hike efforts in order to tame 40-year high inflation. Other geopolitical forces are helping drive prices higher and continue to log jam supply chains.

Yet the economy remains strong by historic standards when looking at the unemployment rate, job openings, and household income. There are also signs that inflation might start to come down from 40-year highs as the housing market cools and downbeat consumer sentiment starts to creep into retail spending data.

Wall Street should be armed with far more data by the end of July and certainly by the end of the summer. The market has also historically rebounded in the second half of the year after the S&P 500 falls at least 15% in the first six months. Plus, calling an exact bottom is nearly impossible and trying to do so can hurt your portfolio if you still have decades of investing left.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Even with the fall, the benchmark index is still up 31% in just the past three years and 60% in the last five. And valuations have already been heavily recalibrated. With this in mind, investors might want to consider buying some stocks at nice entry points that are poised to grow for years to come within areas of the economy that aren’t going out of style anytime soon.

Align Technology’s ALGN Invisalign system changed the orthodontics industry forever. Its clear aligners are true alternatives to traditional metal braces that have continued to grow at a rapid pace and stay miles ahead of its competition. Align has expanded its international reach and it’s successfully tapping into the youth market who could be a key long-term growth area. ALGN stock is down nearly 70% from its highs and it’s trading at its lowest forward earnings multiple in nearly a decade.

Mastercard MA is a credit card titan that’s expanding into a global payments and fintech firm built to thrive in the dynamic world of digital finance. Mastercard’s 2021 revenue surged 23% to outpace its pre-pandemic totals by $2 billion and its top and bottom line outlook for the next two years is fantastic. Mastercard stands to continue to climb in a world that relies less and less on cash.

Last up is Intuit INTU which joins together two unstoppable forces that help make it a strong buy-and-hold candidate: taxes and software. Intuit is arguably most famous for its online tax software, TurboTax. INTU also sells software geared toward accounting, small business money management, and personal finance, including QuickBooks and Mint. Intuit purchased consumer finance firm Credit Karma in 2020 and email-marketing giant Mailchimp in November. And it’s trading 45% below its highs.


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Mastercard Incorporated (MA) : Free Stock Analysis Report
 
Align Technology, Inc. (ALGN) : Free Stock Analysis Report
 
Intuit Inc. (INTU) : Free Stock Analysis Report
 
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