The Top 3 Stocks to Buy in July

At the start of each month, we typically see a good share of new money being put to work by both institutional and retail investors. While it can be difficult to speculate on which sectors will receive the most inflows, particularly with so much rotation going on week to week in the market at this time, adding shares of companies that have been trending nicely or have strong fundamental stories is an intelligent way to approach the start the month.

While summer trading can be lackluster at times thanks to low volume and less liquidity, there are still plenty of standout individual stocks that could outperform in July. With indices trading around all-time highs and many of the biggest tech stocks powering the market higher, there will be plenty of strong investment opportunities in the month of July. If you are interested in adding some new positions to your portfolio this month, we’ve put together a list of the top 3 stocks to buy in July to help you narrow down your options. Let’s take a deeper look below.

Himax Technologies (NASDAQ:HIMX)

If your goal is to add some exposure to semiconductors in July, which makes sense given the current global shortage, you might be inclined to add shares of companies like Advanced Micro Devices or Nvidia. While those companies are fantastic, their share prices aren’t necessarily budget-friendly. On the other hand, a stock like Himax Technologies is a great way to gain exposure to a fabless semiconductor company without the steep price tag. The stock is currently trading at around $16 per share and could be in for a strong month if semiconductor stocks stay hot.

The Taiwan-based company is engaged in display driver integrated circuits and timing controllers that are used in all types of electronics devices including televisions, laptops, mobile phones, and more. Himax Technologies saw its revenues, gross margin, and EPS all reach all-time highs in Q1 2021 and is seeing strong demand across all of its major business segments. Himax even offers a unique way to play autonomous driving and electric vehicles, as the company’s products are essential for the large stylish automotive displays we are seeing in cars these days. This semi stock is close to breaking out to all-time highs and is worth a look if the sector continues its recent strength. 

GrowGeneration (NASDAQ:GRWG)

Cannabis stocks have been out of the spotlight for the last few months after a huge rally to start the year, which is puzzling given that the bullish fundamental story around the industry really hasn’t changed. With more states electing to legalize cannabis use and high-profile figures like Supreme Court Justice Clarence Thomas stating that federal marijuana laws may be outdated, we could be on the cusp of witnessing a “green rush” take place. That’s why looking at some of the leading cannabis stocks like GrowGeneration in July makes a lot of sense.

GrowGeneration owns and operates retail hydroponic and organic specialty gardening retail outlets, which means it plays a key role in supplying the products that growers need to harvest cannabis. It’s currently the largest hydroponics supplier in the country with 55 retail and distribution centers, and the company continues to acquire new locations to expand its market reach. GrowGeneration was recently added to the Russell 2000 index and reported revenue growth of 173% year-over-year in Q1, both legitimate reasons to consider adding shares. If the cannabis sector starts to rally again, this stock is poised to generate strong alpha for shareholders.

Moderna (NASDAQ:MRNA)

The biotech sector might be a place to look for strong opportunities in July, and Moderna is a key name to focus on. The stock is up 124% year-to-date and certainly has some momentum heading into July, particularly after the recent news about how the company’s COVID-19 vaccine can produce protective antibodies against the delta variant of the virus. While biotech stocks can be very volatile, when there is good news behind a company they can experience rallies of epic proportions as we’ve seen with Moderna. It might be a good idea to keep riding the trend until the stock says otherwise.

If you aren’t familiar with Moderna, it is a clinical-stage biotechnology company that develops therapeutics and vaccines based on messenger RNA. This is a groundbreaking approach to therapeutics and the science might help us treat cardiovascular diseases, rare diseases, immunological conditions, and even cancer more effectively. While there are some unknowns about what the COVID-19 vaccine market will look like over the long term, Moderna is certainly going to benefit from having one of three FDA-approved COVID-19 vaccines in 2021.