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The best stocks to buy in August 2018 aren't just "must have" stocks, these are shares of companies with serious breakout potential, just as the bull market sets the record for the longest ever.
Money Morning Economist Garrett Baldwin has crunched the numbers and come up with three of the best stocks to buy right now.
In fact, the way he's putting it, if he just started to invest and had just $1,000 to spend, these are the stocks he'd buy first.
Now, some of these companies aren't household names, and others might not be the typical tech start-ups that make the headlines. But that's part of their appeal. You won't be following the crowd if you invest in them.
But that's essential to how you'll beat the market. Above-average returns come from ditching the herd and finding the best stocks everyone else is missing.
Here are the top stocks for August 2018...
Stocks for August 2018, No. 3: Home BancShares Inc.
Some of the best stocks tap into trends that aren't on everybody's radar yet.
But analysts are paid to get stocks on their radar before the crowd. Money Morning Special Situation Strategist Tim Melvin, for example, has been exploring a major trend in community bank stocks.
He's been on top of a five-year-long trend toward consolidation in the industry.
Must See: This method may be the only way in history to turn a small sum of money into $100,000 without batting an eye. Read more...
Technology costs are climbing for banks, oversight by multiple regulatory agencies is time-consuming and expensive, and community banks can't scale as effectively as larger ones.
As a consequence, there are 4 to 5% fewer U.S. banks every year. They are merging or being acquired outright to overcome these obstacles.
And that's a hugely profitable trend for you.
Not only that, but multiple factors are expected to contribute to further consolidation - factors like the recent changes in the tax law, increasing profitability in the banking sector, and changes in Dodd-Frank regulation.
The consolidation trend is setting up nicely for Home BancShares Inc. (NASDAQ: HOMB), a bank company that benefits from banking consolidation.
HOMB invests in community banks, typically by purchasing and consolidating them.
Last year, HOMB acquired Giant Holdings Inc. and bought Stonegate Bank through purchasing all its common outstanding shares. Then it merged an earlier-purchased bank, Centennial Bank, with Stonegate.
Investors stand to gain as HOMB turns consolidation into a profit machine. Piper Jaffray analysts forecast a more than 16% rise in the share price, from the current $24.02 to $28 over the next 12 months. But that could be too conservative of an estimate. After all, Wall Street is behind on this trend.
Plus, HOMB also offers a nice dividend of $0.48 for a 2.04% yield.
Stocks for August 2018, No. 2: KKR & Co. Inc.
Few investments can be as lucrative for their investors as the returns on private equity.
The Wall Street Journal reports that between 2000 and 2016, returns on private equity hit a soaring 255%. During the same period, the S&P 500 rose only 133%.
Now, access to private equity funds is the province of the superrich. You typically need to be an accredited investor with more than $1 million in assets. But retail investors do have ways to access the returns of private equity firms through publicly traded firms.
KKR & Co. Inc. (NYSE: KKR) is one of the world's leading private equity firms, and you can own a slice of it like any other stock.
It was created in 1976 by two cousins, Henry Kravis and George Roberts, with just $120,000 in partnership.
Currently, KKR manages over $153 billion in assets.
Since the founding, it has given investors a phenomenal 19 to 20% average every year.
KKR currently pays out a $0.68 dividend for a robust 2.60% yield.
Not only that, but Oppenheimer analysts forecast a rise in the per-share stock price to $35. That's a 33% gain from today's share price of $26.36.
But our top stock for August has even better profit potential and is one you won't want to miss out on...
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Stocks for August 2018, No. 1: Alarm.com Holdings Inc.
Alarm.com Holdings Inc. (NASDAQ: ALRM) is one of our strongest picks for August.
ALRM makes cloud-based software for residential and commercial properties. It also makes general security devices, such as motion sensors, door locks, video cameras, garage doors, and even thermostats.
The company has grown sales nearly 30% annually in the past five years. It forecasts profits to grow by approximately 20% per year in the next half-decade.
But what makes ALRM such a potentially lucrative play is that it's an acquisition target.
Its main competitor, Ring, was recently bought by e-commerce giant Amazon.com Inc. (NASDAQ: AMZN) for a whopping $1 billion price tag.
While ALRM's market capitalization is currently $2 billion, a buyout could send the share price soaring.
When AMZN went public with the announcement that it was purchasing the grocery store company Whole Foods, for example, the share price of Whole Foods soared 21% in a day.
This Tiny Stock Could Turn Every $1,000 Invested into $4,719
The biggest tech breakthrough of the decade could be game-changing - and life-changing.
One tiny firm is rapidly developing the parts needed for this new technology, and it recently inked four deals with major players.
Its stock is trading for less than $10 now... but estimates show it could climb to $57.19 by 2025 - a 471.9% gain for those who get in now.