5 Top Stocks to Buy in June

In this Stock Up, we've got a whopping 11 stock ideas ------------------------------------------------------------------------------------------------------------------------------------------------------ [View this email in your browser]( In this Stock Up, we've got a whopping 11 stock ideas... and we'll bust the myth of a June bride. – Anand Chokkavelu, CFA, Managing Editor of Fool.com TWEET OF THE WEEK --------------------------------------------------------------- [Tweet of the Week: Find a job you love. Be nice to your coworkers. Focus on solving customers' promblems. Spend less than you earn. The rest takes care of itself.]( [See all our Tweets!]( 5 Top Stocks to Buy in June --------------------------------------------------------------- Each month, we ask some of our top specialists for a stock pick in their coverage area. [This month]( they've chosen Gilead Sciences ([NASDAQ:GILD]( International Business Machines ([NYSE:IBM]( 3M Company ([NYSE:MMM]( SodaStream International ([NASDAQ:SODA]( and SolarEdge Technologies ([NASDAQ:SEDG](. Gilead Sciences [Keith Speights]( There's no way to sugarcoat Gilead Sciences' problems over the last three years. The big biotech stock lost nearly half of its market cap during the period due to plunging sales for its hepatitis C virus (HCV) drugs. However, I think Gilead is now poised to be a top turnaround candidate. One key reason why is that HCV sales should stabilize soon. The HCV market has come down to a one-on-one battle between Gilead and AbbVie. That should provide a setting for price stabilization. Gilead expects the numbers of new hepatitis C patients to continue to decline, but more slowly than in recent years. With HCV less of a drug for Gilead, the biotech's HIV franchise, which is set to generate solid growth, will be the big story for the company. Gilead recently launched Biktarvy, which market research firm EvaluatePharma projected as [the biggest-selling new drug to reach the market in 2018](. Peak sales for the HIV drug could top $6 billion. Perhaps the most important component to Gilead's comeback, though, is the biotech's pipeline. Gilead and partner Galapagos are developing a promising anti-inflammatory drug, filgotinib. Analysts think the drug could achieve peak annual sales between $2 billion and $3 billion. There are also great opportunities for selonsertib, Gilead's lead candidate targeting treatment of nonalcoholic steatohepatitis (NASH). Gilead stock currently trades around 11 times expected earnings. If HCV sales stabilize, Biktarvy takes off, and the pipeline delivers like I expect, this biotech stock won't remain this cheap for too much longer. IBM [Tim Green]( [The market didn't like IBM's first-quarter report]( in April, sending the stock tumbling despite better-than-expected revenue and earnings. Revenue jumped by 5% year over year, but that growth was driven almost entirely by currency. The company's gross margin also continued to erode, although the declines are getting smaller. A growth stock IBM is not. But that doesn't mean it can't be a solid long-term investment. IBM's growth businesses are expanding at a double-digit pace, accounting for 47% of total revenue over the past year. Cloud revenue is now 22% of total revenue, and it grew by 20% during the first quarter. And cloud delivered as a service, [a key growth driver for IBM]( now has an exit annual run rate of $10.7 billion, up 25% from one year ago. Declining sales in legacy businesses are still offsetting all this growth, leading to headline numbers that fail to impress. But I think the market is being too pessimistic. IBM stock now trades for just about 10.3 times the company's guidance for adjusted full-year earnings. And after a recent dividend bump, the stock yields 4.4%. This is a company that still has significant competitive advantages, including a large customer base dependent on its products and services. The rock-bottom valuation doesn't seem to reflect that. If you're looking for a beaten-down dividend stock in June, look no further than IBM. 3M [Neha Chamaria]( 3M is off nearly 25% from its 52-week highs. Remarkably, the steep fall has come in just the past four months, opening up an opportunity for smart investors to buy shares in the industrials conglomerate that's also among the only eight publicly listed companies that have increased their dividends for a jaw-dropping 60 consecutive years. More so, because the sell-off in 3M shares makes little sense. 3M had a [banner year in 2017]( generating a record $30 billion in sales from a portfolio made up of more than 60,000 products that serve the needs of nearly every major industry you could think of. If you're wondering what kind of products, 3M is the owner of the Post-it, Scotch, Scotch-Brite, Command, Filtrete, and Littmann brands, among others. So why did 3M lose favor with investors? While weakness in the broader market knocked off some gains early on, a sharp drop in the [company's first-quarter earnings]( followed by an outlook downgrade in April added fuel to the fire. In reality, 3M's sales hit all-time first quarterly highs, and two significant one-time expenses hit its bottom line. While one was a tax-related expense, the other was related to the settlement of a lawsuit, which was actually a positive development for the company. Now here's the bigger news: Management downgraded its fiscal 2018 earnings per share (EPS) range estimate by 1% at the midpoint, primarily on the back of unanticipated weakness in electronics. Yet, that was enough to spook investors as they saw 3M's guidance downgrade as a precursor to a slowdown in momentum in the industrials sector. I beg to differ because 3M's outlook still calls for double-digit growth in EPS this year. In fact, 3M is unwavering on its [2016-2021 financials goals]( of growing its EPS by 8%-11% and converting 100% of its net income into free cash flow. It's time you get serious about this dividend growth stock. SodaStream [Demitri Kalogeropoulos]( If it's been a while since you checked in with SodaStream, you might be surprised by just how well the business is doing. The sparkling water machine specialist just posted its ninth straight quarter of double-digit sales gains while achieving record profitability. The important usage metrics are all pointing in the right direction, too, with machine sales and carbon dioxide refills showing strength across a range of markets including Canada, Australia, Japan, and the United States. This is a far different business than the one that suffered painful sales and profit declines in 2014 and 2015. Since then, CEO Daniel Birnbaum and his team have shifted the brand focus from cola to sparkling water, lowered their manufacturing and distribution costs, released popular new machines, and improved relationships with key retailers. As a result, sales and earnings are both [on pace to rise by about 15%]( this year after expanding nicely in 2017. Consumer appetites can change quickly, and that means SodaStream has to keep innovating if it wants to extend its positive momentum. The growth plan includes the launch of a new one-touch machine in the coming weeks and a bigger e-commerce platform that makes home delivery of carbon dioxide canister refills easier for its customer base. Looking further out, there's a big global market opportunity ahead for the company that, in delivering [over 1.5 billion liters of sparkling water]( to consumers last year, can claim to be the world's biggest water brand, by volume. SolarEdge Technologies [Rich Smith]( What went up has come back down again, and that's great news for investors - who now have a chance to buy [SolarEdge stock]( for a great price in June. SolarEdge, one of the world's leading producers of solar inverters for converting direct current electricity from solar panels into alternating current electricity for home use, had a fabulous fiscal Q1, beating Wall Street estimates for both sales and earnings, reporting 11% sales growth, 430 basis points of improvement in gross profit margins, and a 134% increase in earnings per share (with 149% improvement in cash flow). Just like the analysts at [Vertical Group predicted]( back in February, competitors to SolarEdge are "nowhere in sight." SolarEdge stock soared 26% in the few days following its Q1 2018 earnings release, but then, last week, the stock suffered whiplash. Over two days of trading, SolarEdge gave back literally every cent of its gains. The reason? No one knows. There's been no bad news whatsoever, that I can find, to explain the stock's sudden turnaround (unless you call investors "taking profits" a reason). As for the rest of us, thanks to the irrational decision to sell off SolarEdge stock, investors who missed their chance to buy before earnings have been given a second bite at the apple — an opportunity to buy SolarEdge stock at its pre-earnings price, knowing beforehand just how wonderful those earnings numbers would be or already were. If I were you, I'd grab that apple. --------------------------------------------------------------- In case you missed it: Venture capitalist Mary Meeker recently dropped her massive (a relatively svelte 294 slides this year) [Internet Trends report](. It is a chart-filled must-skim for serious tech investors who want to get some great high-level and granular data points. For example, the first non-title slide shows that global smartphone sales growth dropped to 0% last year. --------------------------------------------------------------- The Best Time to Buy a House ... The Best Time to Sell a House Regardless of if you're a buyer or a seller, due to the magnitude of the money involved, you don't want to make a housing decision willy-nilly. There are many, many considerations but if you've ever wondered about how the seasonal flow of housing prices affects things, we've got the answers for [buyers]( and [sellers](. Hint: We're in the heart of real estate season right now. --------------------------------------------------------------- Seasonal myth busting: Meanwhile, June is no longer the #1 month for weddings. It's either September or October now depending on the data set you look at. --------------------------------------------------------------- SPONSORED [This stock could be like buying Berkshire in 1992]( This Stock Could Be Like Buying Berkshire in 1992 You probably already know Berkshire Hathaway has racked up amazing, life-changing returns over its 50-year history. But you might not know that we've found a much smaller company, 1/30th Berkshire's size, that's closely imitating Berkshire's performance. [Learn More]( --------------------------------------------------------------- 47% of American Pre-Retirees Failed This Basic Social Security Quiz - Can You Pass It? You get a passing grade if you can get four of these five true/false questions correct: - Under current Social Security law, my benefits will not be reduced if I claim them at age 65. - My spouse is eligible to receive Social Security retirement benefits, even if he or she has no individual earnings history. - If my spouse dies, I will continue to receive both my own benefit and my deceased spouse's benefit; the total Social Security benefits I receive will not change. - Social Security retirement benefits are based on my earnings history; I'll receive the same monthly benefit amount whether I start collecting before or after my full retirement age. - If I am still working when I claim my Social Security, my benefit might be reduced, depending on my earnings and my age. Done? See the answers [here](. Regardless of how you scored, remember that we're proud of you no matter what. --------------------------------------------------------------- Warren Buffett's Social Security check: Our [best reckoning]( is between $1,527 and $2,562 per month. --------------------------------------------------------------- 3 Chinese Internet Stocks to Put on Your Radar Chinese stocks are roaring back into favor with many of the biggest players hitting new all-time highs. You don't need to stick to the dot-com darlings to cash in on the internet revolution taking place in China. There are many stocks percolating under the investing radar of the world's most populous nation. Momo ([NASDAQ:MOMO]( Sogou ([NYSE:SOGO]( and Baozun ([NASDAQ:BZUN]( are some of the promising investments that are making waves in China. They're not household names outside of their home country, but these off-the-radar stocks are names that investors may want to consider adding to their portfolios now. The [full write-up](. --------------------------------------------------------------- China data point from Mary Meeker's presentation: China's GDP growth is increasingly being driven by domestic consumption...an estimated 62% this year vs. 35% 15 years ago. --------------------------------------------------------------- FEATURED PODCAST --------------------------------------------------------------- [Motley Fool Industry Focus]( The IPO Class of 2017... Where Are They Now? After digging into these stock market debuts last year, we're revisiting Canada Goose ([NYSE:GOOS]( Blue Apron ([NYSE:APRN]( and Stitch Fix ([NASDAQ:SFIX]( to cover the latest developments at each company and to rethink what investors need to know going forward. [Subscribe on iTunes]( In next week's Stock Up email... We're open to requests. Let us know what topics you'd like to see explored in coming weeks by e-mailing us at stockup@fool.com. Join the 1,300,000+ people who follow us! [Twitter]( [Facebook]( We work fervently, feverishly, and Foolishly to make sure all the facts and figures we publish in our emails are 100% accurate and up to date. Returns as of June 6, 2018. Our mailing address is: The Motley Fool | 2000 Duke St. | Alexandria, VA 22314 Want to change how you receive these emails? You can [update your preferences]( or [unsubscribe from this list](. This is a promotional message from The Motley Fool Copyright © 1995-2018 The Motley Fool. All rights reserved. [Legal Information.](