A new month, a new Best Buys List.
Each month, I’ll give an overview of my favorite stocks of the month.
Let’s dive into this update and show you some of my favorite stocks.
August 2026
The S&P 500 was up +1.2% in August.
Investors are fearful today according to the Fear & Greed Index:
Best & Worst Performers
This overview shows you the best and worst performers in our investable universe.
Worst performers
The cheaper we can buy great companies, the better.
The biggest decliner this month? FinVolution, losing 31%.
FinVolution Group runs an online consumer finance and fintech platform across China and international markets.
They reported second-quarter revenue and net income that trailed the prior year, along with rising loan delinquency trends.
Best Performers
Salesforce was this month’s best performer, increasing by 35.7%.
Salesforce provides customer relationship management (CRM) software and enterprise cloud computing solutions.
Salesforce reported a second quarter earnings beat and an 11% year-over-year increase in revenue, easing market concerns about slowing software demand.
Spotlight: Rollins ($ROL)
How Rollins Makes Money
Rollins is the parent company of Orkin and a global leader in pest and termite control.
Rollins provides service to two main groups:
Residential homeowners
Commercial businesses
Why Rollins deserves to be in the spotlight:
Route Density: Pest control is a localized business, the more customers Rollins has in a neighborhood, the less time technicians spend driving. That creates operating leverage and keeps margins high.
Recession Resistance: Pest control is an ongoing, non-discretionary need, meaning customers keep paying Rollins no matter what the economy is doing.
Recurring Revenue: Customers usually sign long-term, recurring contracts, giving Rollins predictable, stable revenues and cash flows.
Why the stock is down:
Rollins is an amazing business, but because it is so predictable and high-quality, the stock is almost always priced for perfection.
Rollins’ residential part of the business had some softness last quarter, and management slightly lowered guidance for organic revenue growth by 1% for 2026.
That led to the stock decreasing around 12%.
Rollins stock is down nearly 50% from the beginning of the year, which has brought it down from a very expensive valuation to a more reasonable multiple.
September Best Buys
I scanned our Buy-Hold-Sell List for great quality compounders, defensive stalwarts, and dependable dividend payers trading at attractive discounts.
Let’s dive into 5 of our favorite income ideas for this month!
5. Northrop Grumman ($NOC)
How does Northrop Grumman make money?
Northrop Grumman is a defense contractor that builds aerospace systems, defense technologies, and advanced weapons for the U.S. military and its allies.
The defense industry has very high barriers to entry.
Developing stealth bombers and space systems requires specialized knowledge, a lot of capital, and deep government relationships that new competitors can’t replicate.
Northrop is currently sitting on a record $105 billion backlog of orders.
That backlog will turn into future earnings, which management uses to buy back shares and increase the dividend.
4. Vinci SA
How does Vinci make money?
Vinci is a French concessions and construction company. They design, finance, and operate major infrastructure projects globally, with a heavy focus on European toll roads and international airports.
Vinci’s toll roads and airlines are local monopolies, which gives them strong pricing power.
Every time motorists drive on Vinci’s motorways or airlines use their airports, they collect fees.
Management takes the cash flow from these mature concessions and uses it to fund new assets, like the energy portfolio Vinci is building, along with a very attractive, growing dividend for shareholders.
But there’s more
Northrop Grumman and Vinci are just two of our five favorite ideas this month.
The best one is still to come.
It’s a business we believe is becoming better, more predictable, and more profitable.
And it’s one we’re planning to buy for the Compounding Dividends portfolio.
Before the investment case rolls out, we’ll be celebrating with some limited-time discounted opportunities to become a paid partner.
Make sure you don’t miss it by getting on the waiting list.
I’ll send you a checklist for Chuck Akre’s 3-Legged Stool Framework when you do.
One Dividend At A Time,
-TJ
Used sources
Interactive Brokers: Portfolio data and executing all transactions
Fiscal.ai: Financial data
Disclaimer
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