5 Top Stocks for August

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A new month means we have a fresh batch of companies for you to consider. Also, this week, you can watch a video about investing in marijuana stocks, read how one-day shipping is affecting Amazon, learn how to calculate total returns, and more.
— Katie Carrera, Stock Up Editor

5 Top Stocks for August


5 Top Stocks

Rik Silverman/The Motley Fool

Summer is a great time to research stocks, and here are a few ideas to get you started if you're looking to dig into a few companies.

  1. MongoDB (NASDAQ:MDB): There's data devoted to tracking pretty much everything you do and it all needs to live somewhere. MongoDB's databases were built to handle both structured and unstructured data, in the cloud and on-site data centers, giving it more versatility over legacy systems. The company is growing rapidly — it posted 78% revenue growth year over year in June to $89.4 million. Most of that money comes from subscriptions, a recurring revenue source that long-term investors should be encouraged by as MongoDB grows its customer base.
  2. Vail Resorts (NYSE:MTN): The owner of some of the best-known ski resorts in the world is coming off a strong winter season where the company reported double-digit revenue and income growth. Vail's acquisition strategy is also key to its growth prospects. Its recent deal to buy out competing Peak Resorts for $264 million will expand the company's reach in the Northeast, Midwest and Mid-Atlantic regions.
  3. Ollie's Bargain Outlet (NASDAQ:OLLI): In its most recently reported quarter, the retailer that specializes in overstocked, discontinued and other goods it can pick up for cheap, reported 18% growth in sales year over year and net income increased 27%. Ollie's has 330 stores in 23 states, meaning it can open new stores without cannibalizing its existing locations and the company doesn't seem close to oversaturating its key markets.

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Watch: How to Invest in Marijuana Stocks


How to Invest In Marijuana Stocks

Global cannabis sales are expected to soar to $16.9 billion this year, and some analysts estimate it could eventually balloon to $166 billion. While sales likely won't approach that figure in the next ten years, we're breaking down the opportunity and why investors are excited.


One-Day Shipping Is Already Having a Big Impact on Amazon

Back in April, Amazon (NASDAQ:AMZN) CFO Brian Olsavsky announced the company's plans to shift its Prime shipping program from two-day shipping to one-day shipping. Olsavsky had warned the company was investing an additional $800 million in its logistics operations to keep inventory stocked closer to shopper's homes.

Amazon's efforts showed up in a big way on the company's second-quarter earnings release. The costs added up and resulted in lower-than-expected profits. And those costs will keep climbing next quarter, negatively affecting Olsavsky's outlook for third-quarter operating income. On the bright side, North America retail revenue growth accelerated, something Olsavsky attributed in large part to the transition to one-day shipping.

This is the first look at the impact of one-day shipping will have on Amazon's business, but it's going to remain a noticeable factor in the company's results for the next year. But long term, it could be a positive change.

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How to Calculate Total Stock Returns

Many investors focus their attention on how a stock's price changes over time. However, when you're talking about dividend-paying stocks, that doesn't even begin to tell the entire story.

For example, if I tell you that Verizon was trading for roughly $54 per share three years ago, and today it's trading around $61 per share, it may sound like investors who bought the stock made $7 per share over those three years.

However, if I then tell you that over the past three years, Verizon also paid its shareholders a total of $7 per share in dividends, that changes the story a little. Instead of the $7 capital gain per share, which translates to about 13%, investors made twice that much when taking dividends paid into account.

Total return takes both capital gains and dividends into account, in order to provide a complete picture of how a stock performed over a specified time period. This can be extremely useful for evaluating returns among dividend-paying stocks, and for comparing the performance of dividend-paying stocks to those without any dividends. It can also help compare investment results when stocks were held for different lengths of time.

Read the full story to understand the different types of return calculations, and we'll walk you through the math, too.


Easily track your favorite stocks with our new browser extension for Google Chrome. Add it to Chrome by going here, then open a new tab and use the "Manage Tickers" button to customize the page with your favorite stocks.


Quick Reads

  • Is there anywhere for Tesla's solar business to go from here?
  • Lockheed Martin delivered another positive quarter and the company appears to be laying the groundwork for its next growth projects.
  • Starbucks proved at least this contributor wrong with its recent winning streak.

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