Stock Picks for August 2026

Today is August 17th , 2026 and it’s time for some stock picks.

For the video of this article please click here.

Market overview and outlook

This time last year I picked Merchants Bank of Indiana (MBIN), Parker-Hannifin Corp (PH) and Hubbell Inc (HUBB). These stocks were up 71.1%, 43.4% and 20.4% respectively in USD including dividends, for an average return of 44.9%. This compares with 22.7% for the MSCI World Equity Index in USD including dividends as represented by the URTH ETF.

Valuations for equities remain very high with the Shiller Cyclically Adjusted Price to Earnings ratio at 41.2. The historical average over the last almost 150 years is 17.8. These high valuations are somewhat warranted as earnings growth has been stellar during the last couple of years particularly with the AI buildup but they are still dangerously high.

Because of the high valuations we believe that equity returns will be below average over the next decade. It is therefore even more important than usual to own good companies that trade at reasonable valuations in order to achieve good returns. Our top stock picks for August represent such investment opportunities.

Affiliated Managers Group (NYSE: AMG)

My first stock pick is Affiliated Managers Group, symbol AMG on the NYSE. AMG is a strategic partner and long-term investor in independent investment firms globally. It focuses on generating long-term value by investing in a diverse array of high-quality independent partner-owned firms, through a proven partnership approach.

The bullish thesis for Affiliated Managers Group (AMG) centers on its highly successful pivot toward high-margin alternative and private market strategies. By partnering with premier specialist boutiques, AMG has insulated its revenue from traditional active management fee compression, driving record AUM and massive cash generation. Furthermore, management is aggressively converting this robust free cash flow into shareholder value through highly disciplined capital allocation and extensive stock repurchases. Ultimately, AMG offers investors a deeply diversified, capital-light vehicle to capture the alternatives boom while heavily rewarding shareholders. The stock is trading at about 10.5 times earnings and it generates a strong double digit return on equity. I like it!

MGIC Investment Corp (NYSE:MTG)

My second stock pick is going to be a mortgage insurance company, MGIC Investment Corp, symbol MTG on the NYSE. Mortgage Guaranty Insurance Corporation  is the leading provider of private mortgage insurance (covering residential first mortgage loans) to lenders to protect against loss from defaults on low down payment loans.

The bullish case for MTG is anchored in its exceptionally strong capital generation and relentless commitment to shareholder returns, despite a complex housing market. Operating as a dominant player in private mortgage insurance, MTG continues to post elite profitability metrics—highlighted by an incredibly low 24.4% combined ratio and a 14.5% return on equity in the second quarter of 2026. Because high home equity across the U.S. is keeping actual mortgage default severities low, MTG’s primary insurance in force has steadily grown to nearly $305 billion without stressing its balance sheet. Most importantly, MTG is flush with excess capital, sitting on $2.7 billion above its regulatory requirements. Management is aggressively funneling this cash back to investors; armed with a newly authorized $750 million share repurchase program and a recently hiked quarterly dividend, MTG presents a highly disciplined, cash-generating compounder that consistently grows its underlying book value, while trading at only 9.2 times earnings. Very good!

Matson Inc (NYSE: MATX)

My third stock pick is Matson Inc, symbol MATX on the NYSE. Matson Inc. is a leading U.S. carrier in the Pacific, providing service between the mainland and Hawaii, Alaska, Guam, and Micronesia. Also, has a premium, expedited service from China to Southern Cal. Its fleet of 32 vessels includes containerships and combination container and roll-on/roll-off ships

The bullish case for MATX centers on its unmatched pricing power and structural advantage in expedited transpacific shipping, where ongoing global supply chain constraints and surging e-commerce demand are driving massive profitability. Because shippers are increasingly willing to pay premium freight rates for Matson’s highly reliable, high-speed China-to-US services rather than risk standard shipping delays, the company is capturing market-beating margins—recently highlighted by a 40% year-over-year surge in operating income in the second quarter of 2026. This core strength is further amplified by its strategic expansion into Southeast Asia and a resilient domestic logistics business. Most importantly, Matson is a cash-flow machine, funneling its windfall into aggressive shareholder returns through an expanded share repurchase program and growing dividends, all while fully funding the modernization of its fleet with new LNG-powered “Aloha Class” vessels. Ultimately, MATX offers investors a highly disciplined, capital-returning logistics leader that fundamentally thrives on the very global shipping volatility that disrupts its competitors. Strong balance sheet, consistent profitability and only 14 times earnings. Great!

Give Us a Call

As always, if you have any questions about these investment opportunities or any other investment related matter, please give us a call! 604-288-2084

Thank you!

Read previous article