Stock Picks for July 2025

Stock Picks for July 2025

Today is July 7th, 2025 and it’s time for some new stock picks!

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Market Overview

June was a good month for stocks with averages going up 4-6%. The US economy is remaining stronger than a lot of investors were expecting with unemployment staying very low and inflation subsiding slightly, despite the tariffs that took effect earlier this year. So things are looking better than expected however equity valuations are high, making it hard to find good investment opportunities. Having said that, we are still able to find some good businesses at good prices to buy so here are my top 3 picks:

Allison Transmission

My first stock pick for the next 12 months is Allison Transmission Holdings Inc, symbol ALSN on the NYSE. Allison Transmission is the largest manufacturer of fully automatic transmissions for commercial vehicles. The company’s automatic transmissions allow customers to
achieve better fuel and operator efficiency than less expensive manual and automated manual transmissions. The company’s transmissions can be found in trucks, buses, heavy-duty pick-up trucks, motor homes as well as in off-highway equipment and military vehicles.

This company has been very nicely profitable over the last 10 years, grew its revenue from 2 billion to 3.2 billion dollars, grew its equity from 1.2 billion to 1.8 billion in the same time all while paying dividends to its shareholders. It trades a very reasonable valuation of 11x forward earnings and it’s buying back its own shares, recognizing the value of its shares, to the tune of 4.3% of the shares outstanding per year, at current price levels. Military spending is strong, the economy appears to be strong so the chances of continued high profitability are good. I like it.

Hartford Insurance Group

My second stock pick is the The Hartford Insurance Group., symbol HIG on the NYSE. Hartford Insurance provides property and casualty insurance, group benefits and mutual funds. The Company currently conducts business the following segments: Business Insurance, Personal Insurance, Property & Casualty Other Operations, Employee Benefits, and Hartford Funds, as well as a Corporate category. The company generates a majority of its revenue from Business Insurance.

This company has been able to grow its revenue from 16 billion per year to 26 billion over the last 10 years and has grown its earnings per share from 4 dollars to over 10 dollars per share in the same time period. Not every year was profitable and notably it had a bad loss in 2017 but generally speaking it is a consistently profitable business.

The stock trades at very reasonable 11.3x forward earnings and the company is buying back its own shares at the rate of 4.4% per year with management recognizing the value of the shares. We agree with management and we thing these shares should be bought!

Alphabet Inc.

My third pick is Alphabet Inc, symbol GOOGL on the Nasdaq. Alphabet is the parent company of Google. The California based company derives slightly less than 90% of its revenue from Google services, the vast majority of which is advertising sales. Alongside online ads, Google services houses sales stemming from Google’s subscription services (YouTube TV, YouTube Music among others), platforms (sales and in-app purchases on Play Store), and devices (Chromebooks, Pixel smartphones, and smart home products such as Chromecast). Google’s cloud computing platform, or GCP, accounts for roughly 10% of Alphabet’s revenue with the firm’s investments in up-and-coming technologies such as self-driving cars (Waymo), health (Verily), and internet access (Google Fiber) making up the rest.

Alphabet, one of the so-called magnificent seven stocks, has been very profitable since is founding. With Open AI and ChatGPT recently entering the search market which Google dominates some investors believe that Google’s internet search dominance will come to an end, as more people as switching to AI tools for internet search. The result has been that Alphabet’s valuation is now at 18.4 times forward earnings is well below its historical average. This is one of the reasons we like it. The stock’s valuation is now reasonable so as long as the company delivers decent rather than stellar results and we will still get a good return from the stock. One thing that excites me about investing in the internet giant is its leadership position in quantum computing, which could be the next big thing the markets latch on to.

Give Us a Call

As always, if you have questions about whether these stocks fit in your portfolio or if you have any other investment-related questions, give us a call! 604-288-2084

Thank you!

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