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3 Stocks I’m Buying (July 2023)
Three quality companies.
Three unique strategies to buy them.
Last month, I kept most of my money on the sidelines.
I correctly guessed that stocks would rally based on Wall Street exuberance over the debt ceiling. And there wasn’t much I wanted to buy.
This month, a lot of stocks are still overvalued…
But now, I’m using a variety of tactics like put options and limit orders to capitalize on the situation.
Here are the three stocks I’m buying in July, 2023.
1. Buying: Texas Instruments Incorporated ($TXN)
One of the few stocks that’s actually trading lower than my initial purchase price.
Texas Instruments makes semiconductors, voltage regulators, and electronic components. Historically, this is a market-beating stock. With a 10-year average annual total return of 20.14%.
However, shares recently dipped below $170. And I happily bought more.
Texas Instruments is currently yielding 2.90% in dividend income.
And I’d love to build my position to 35 or 40 shares. Ensuring at least one extra share per year, “on the house” via dividend reinvestment.
2. Shorting: The Kroger Co. ($KR)
Kroger investors recently received some great news.
In June, America’s largest supermarket chain announced a 12% dividend increase. Beating inflation, yet again!
I love this stock and would love to build my position up to at least 250 shares. However, I’d also like to buy more shares at a little less than their current market value.
Which is why I’m selling short-term, cash-backed puts on Kroger stock.
If the company continues trading above $45, I collect weekly cash flow via the options premium. And if the stock dips lower, I get the shares I already want to own.
A win-win scenario.
3. Limit Ordering: American Express Company ($AXP)
I’m a huge fan of American Express credit cards. And I think this stock often trades at a discount to its actual value.
Whenever investors panic over interest rates and borrowing, American Express stock goes down. Which is weird, because this is a business that targets high-income customers.
The average Platinum Card holder, for example, has a net worth of $4.3 million.
Despite this, American Express often trades at a PE ratio under 15.
And, the company has an extremely safe dividend payout ratio of just 22.71%.
As well as a 5-year compound annual dividend growth rate of 9.53%.
I have a personal goal to buy 100 shares of American Express stock this year. Effectively letting the company’s dividends pay for my Gold Card membership.
However, the stock’s current price of $168.07 is a little too rich for me.
And I’m setting a 90-day limit order at $149.99 per share.
Conclusion
Stocks have rallied, mostly on sentiment, but I believe the market will retrace its March lows at some point this year. Mostly due to fundamental issues like 7% interest rates. As well as ongoing corporate lay-offs.
When this correction happens is anyone’s guess.
But in the meantime, there’s no need to worry. Since there are still plenty of ways to maximize your money.
Either through buying quality stocks that haven’t rallied. Setting limit orders to ensure you get a fair entry price. Or, selling put options on world-class stocks and getting paid to wait until the market does correct.
No matter the situation, there’s still a way to profit.
Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.
